@Risk

Supply chains involve people, and that means there are always embedded risks from “the human element.”

Employees quit. They strike. Sometimes they get sick and can’t work. And occasionally, an employee who’s an integral component of your supply chain will lie, cheat and steal in a manner that could threaten your company’s entire future.

Think I’m exaggerating? I’m not. For proof, take a look at “Bribes Let Tomato Vendor Sell Tainted Food,” an article published last week in The New York Times.

In the article, reporter William Nueman reveals that federal agents have uncovered a startling, widespread scheme of corruption in the food industry. SK foods, one of the nation’s largest tomato processors, is at the center of the plot because according to federal prosecutors, SK Foods’ owner and others there offered bribes to a handful of corporate buyers in exchange for lucrative contracts and confidential information on bids submitted by competitors.

In addition, SK Foods also allegedly shipped its customers millions of pounds of sub-par bulk tomato paste and puree, using falsified documentation to mask the problems. “Often that meant mold counts so high the sale should have been prohibited under federal law; at other times it involved breaching specifications in the sales contracts, such as acidity levels or the age of the product,” Nueman reports.

Purchasing managers from Kraft Foods, Frito-Lay, Safeway and B&G Foods have pleaded guilty to taking the bribes. But, many more companies (over 55, in all) received shipments of tainted product. Some detected problems; many others did not, allowing the contaminated tomato paste and puree to be used in products sold to consumers.

Nueman does a fine job of laying out the details of the case, and he also points out the many levels of concern raised by this far-reaching supply chain scheme. For instance, now federal agents have broadened their scope to look at allegations of collusion and price fixing involving SK Foods and other tomato processors. News of corruption like this also makes it crystal clear that food manufacturers need to be more aggressive about monitoring the quality and safety of their ingredients. And, it shows us all once again, that the integrity of our supplier networks are fundamentally and critically dependent on the integrity of our employees.