Updated Sunday, June 6, with undated comments from a McDonald's Web site.
By now almost everyone who frequents McDonald's has seen headlines similar to the following:
McDonald's Recalls 12 Million Shrek Drinking Glasses Over Toxic Metal
The question we should be asking as Enterprise Risk Management (business continuity/COOP) practitioners is: How did this happen? Actually, the question should not be how but WHY.
According to a HILIQ article (http://tinyurl.com/33f9r7o) McDonald's purchased the glasses from ARC International of Millville, NJ.
However, the article continues, "While ARC International is credited with the manufacture, it appears the glasses were really manufactured in China according to a CNN report"
About seven million glasses have been sold with another five million in outlets or warehouses.
The question is: Who is responsible for allowing cadmium-laced glasses to get into the hands of McDonald's customers, especially small customers?
The article notes that "The U.S. Consumer Product Safety Commission (CPSC) announced the voluntary recall early Friday. It warned consumers to immediately stop using the glasses. McDonald's is expected to post instructions on its website next week regarding refunds.
"The CPSC stated in its recall notice that ''long-term exposure to cadmium can cause adverse health effects.'' Cadmium is a known carcinogen which can also cause bone softening and severe kidney damage. The kidney damage of cadmium poisoning is irreversible and does not heal over time. "
From an ERM/BC/COOP perspective, both ARC International and McDonald's are on the hook, and for the same reason - failure to perform "due diligence."
Why not the Chinese manufacturer? Simple: Neither ARC nor McDonalds can control a foreign company, particularly a Chinese company.
China has a long and unfortunate history of sending defective and dangerous products to the U.S. (see http://tinyurl.com/27o5uqq). Given the justified reputation for providing shoddy and dangerous products, it falls on the importers - in this case ABC International - to carefully check the incoming products. Again, based on China's record, frequent random samplings would have been in order.
McDonalds likewise should have checked the product. Granted, it had a right to "assume" that ARC International inspected the Chinese product and stood behind its quality assurance/quality control. That might have been sufficient for Joe's Burger Joint in Beautiful Downtown Burbank, but when you are a McDonalds and damage to your reputation is an international concern, then this practitioner believes it behooves McDonalds to do its own sampling.
'Course maybe reputation is no big thing to McDonalds; it wasn't so long ago it used beef fat to fry its fries in India - does anyone in India remember or care?
Would an ERM-BC-COOP practitioner been able to side-track the problem before it put poison glasses into little peoples' hands? Probably not.
Not because the practitioner would have overlooked or ignored the threat but because the practitioner probably would not have been involved or aware of the purchase. The problem, our problem, is invisibility - we, practitioners, are "invisible" to very senior managers (until something goes "bump in the night").
One of the reasons I believe we are "invisible" to Very Senior Management (VSM) is the name many of use elect to call ourselves: "Business Continuity" practitioners/planners/professionals, etc.
"Business Continuity" fails to suggest, to me in any event, that we are RISK MANAGERS and that means any and all risks, not just ones that interrupt work flow. Reputation is a very big item on the risk list; just ask Deon Binneman (email@example.com) , a reputational expert.
This "incident" then points up a couple of things.
Thing One: Organizations must take responsibility for vendor products. It makes no difference if the product is a novelty glass or a steel casing; incoming inspection is a necessity. How great an inspection depends on the vendor's history with the company and what goes on at the vendor - change of management, budget concerns, labor problems, etc. (Ask British Airways what happens when a vendor's staff strikes.)
Thing Two: We - practitioners - need much greater visibility and I believe we need to rethink what we call ourselves as a first step toward gaining, and holding, that visibility. We need to be involved, by executive fiat, in ALL aspects of the organization. We may be limited to recommendations, but at least VSM will have the recommendations of professional "What If" sayers.
To be fair
In a McDonald's press release at http://tinyurl.com/23ofjn2, the company states:
In collaboration with the Consumer Product Safety Commission (CPSC), and as a precautionary measure, McDonald’s USA today issued a voluntary product recall of the four Shrek Forever After™ promotional glassware currently being offered in U.S. restaurants.
To be clear, the glassware was evaluated by an independent third-party laboratory, accredited by the CPSC, and determined to be in compliance with all applicable federal and state requirements at the time of manufacture and distribution. However, in light of the CPSC's evolving assessment of standards for consumer products, McDonald’s determined in an abundance of caution that a voluntary recall of the Shrek Forever After glassware is appropriate.
Is the glassware unsafe? The CPSC has said that the glassware is not toxic. In addition, the glassware was evaluated by an independent third-party laboratory, accredited by the CPSC, and determined to be in compliance with all applicable federal and state safety requirements at the time of manufacture and distribution. This action is being done as a precautionary measure.
Didn’t McDonald’s test the glassware? Yes. McDonald’s safety standards are among the highest in the industry, and we have a strong track record. The glassware was evaluated by an independent third-party laboratory, accredited by the CPSC, and determined to be in compliance with all applicable federal and state requirements at the time of manufacture and distribution. It’s important to know that the CPSC has said that the glassware is not toxic
John Glenn, MBCI
Enterprise Risk Management practitioner
Hollywood - Fort Lauderdale Florida
JohnGlennMBCI at gmail dot com