Minimum 6 pages:- Scenario This is a true story that dominated the media in Cana
ID: 434951 • Letter: M
Question
Minimum 6 pages:-
Scenario This is a true story that dominated the media in Canada in the summer of 2008 and shook an established and trusted company to its core. Once the crisis was over, 22 people had died as a result of tainted meat. More details are easily available online but the following is from an April 2013 Financial Times article. The Story Maple Leaf Foods is one of the leading food processing companies in Canada, where many of its processed meat brands are household names. The company also supplies restaurants and hotels. The Challenge On August 12 2008 management became aware of a possible case of listeriosis contamination at one of its meat processing plants near Toronto. By August 23 the contamination had been confirmed and by the end of September more than 20 people's deaths had been linked to the listeriosis outbreak associated with Maple Leaf Foods. Many more fell ill. The Canadian press attacked the company and a number of class-action lawsuits were launched on behalf of victims and their relatives. Consumers started to avoid Maple Leaf brands, and trade customers began switching to other suppliersExplanation / Answer
Mapel Leaf Food Crisis 2008
In case of Mapel Leaf Food Crisis, being a Food company it shows that they have given less privilege to appraisal cost because if the would have given privilege to appraisal cost then this case would never come to an existence. they would have caught the listeriosis during the initial stage while performing the regulatory check.
2. Prevention cost: Prevention cost is a cost which is incurred by a company before any mishappening arises in the market. prevention cost includes the development of a system which ensures quality products, training to the employees to ignore defect in the product, a timely audit of the developed quality system to refill gap if any there is, supervision, data gathering, support to suppliers etc. Advantages of prevention cost are as follows:
According to the above case, we can say that a company cannot survive without developed system, trained employees or supervision but it may be the case that they have given less preference to it and put less stress on prevention cost which may be the loophole they had in its system.
3. Internal Failure Cost: Internal failure cost is something which a company always ignore to be used, using it means a company has started working from the bottom line. Internal failure cost helps a company to remove a defect from the product within the company itself, on the other hand, it is a time-consuming process which includes rework, downgrading cost, recall a product from suppliers etc. Internal failure can be detected after the product processed by the manufacturing unit. The advantage of Internal Failure cost are as follows:
According to the above case its difficult to say that a renowned company like Mapel Leaf Food has neglected Internal Failure Cost in its budget but after the crisis it is not wrong to say that they have neglected it otherwise it will not difficult for them to stop supplying tainted meat before it has gotten too late to stop.
4. External Failure Cost: external Failure Cost is a cost which a company incurred after delivering defected product to the customers. it is a worst happening case in which a company face if it has not established external failure cost it may deteriorate its goodwill, customer trust, product demand in the market. External Failure cost includes Warranty, Guarantee, recall of product from the customers, legal actions taken by customers etc. Advantages of External Failure cost are as follows:
It's easy to apologize and makes things at the right place before it got worst which has done by Mapel Leaf Food and put themselves openly in the public and apologized in front of them which will take time to rebuild its image in the market but for sure not a NO. This a power of External Failure Cost they were ready to take the blame because they were prepared.