A recent article in Fortune discusses how McDonald did a much better job of product recall than J&J and BP. The question is why are they able to do so? The product in question are 12 million Shrek glasses that were discovered to contain slightly higher level of cadmium that can have potential long term health risks. Legally the cadmium levels are not a problem but with huge potential to lower consumer trust in McDonald.
If you think about it - more the consumer facing the product is the more is the customer sensing and responding ability. Coupled with that is McDonald's realization that it is the largest buyer of toy products (ahead of any Toy operation like Toys R Us etc) for their children market.They have one of the greatest supply chains and franchising systems but are not mesmerized by their own strengths.
Contrast some other recalls:
- Bayer dithered while recalling Baycol and as one ex-Bayer PR person mentioned the management refused to believe that all their meticulous drug development could actually have problems. The inability to seize the problem fast was because the company spent more energy in internal investigations and less on dealing directly and immediately with customer problems. Immediate recall might have saved the Bayer prescription business.
- J&J also suffered from needless obsession with things inside the company rather than what customers were thinking and going through.
- BP lost time finger pointing at alliance partners because they did'nt see the public effect of the oil spill having being at the most exposed to the rare gas station mishaps at the consumer end of their business.
All B2B ultimately has an individual customer at the end of the chain who pays a few dollars for a gallon of oil, a McMeal, a pharma product but who is a also member of the larger public. The more the product is removed from the customer either physically in the value chain ( the BP oil well) or is distant technologically (as in pharmaceuticals with years and millions spent on research ) the more managers feel protected and insulated. This insulation is like a bubble and not unlike the one Emperor Nero was in while Rome famously burnt.
Over reaction at the first hint of a consumer or public problem may seem like an overkill but that is what pure consumer companies like McDonald do. They figure out what to do with the glass supplier i.e. ARC International of Millville NJ for the McDonald Shrek glasses later.