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CNN reports on a new study by Deloitte Consulting that suggests companies have placed so much emphasis on efficiency and cost-cutting that they have helped to create safety problems in the supply chain, and are ill-prepared to deal with their consequences.

"The search for cheaper labor, cheaper raw materials, and cheaper transportation - the quest for efficiency - has forced the focus of companies to switch from revenue growth to cost reduction," CNN quotes Deloitte as saying in the study. "Individually, these forces have changed the world in which we live and conduct business. But when combined, these forces can create a perfect storm of risk not seen before in the history of commerce or humankind.”

Three recent examples cited in the study: Exploding laptop batteries, melamine-tainted pet food, toothpaste laced with anti-freeze. “All three products were recently imported into the United States and all three illustrate how companies have grown more vulnerable to global glitches in product safety and even potential terrorist risks,” CNN writes.
KC's View:
Fascinating piece, especially because the folks at Deloitte quite rightly point out that efficiency hasn’t just put the supply chain at risk, but also, more importantly, consumers and brands.

The drive to make efficiency the primary focus in so many businesses – often at the cost of effectiveness – has the potential of hurting a lot of people, especially if the created weaknesses can be exploited by our enemies. Part of the problem, of course, is the commoditization of so much business, with the constant harping on cheap, cheaper, cheapest. Many businesses have forgotten how to talk to and with their customers, and have reduced the conversation to this coupon or that deal…ignoring the possibility that by really engaging with the customer, the nature of the shopper-shopkeeper relationship can be changed.