Question

Milk quality control at Wiliju company

Wiliju is a dairy company in inner Mongolia. The market is fast growing. As part of a partnership with a famous global leader company in dairy products, a mission of experts from a worldwide renowned consulting cabinet recommends to re-organize the supply chain in order to ensure a total quality control of the milk provided by the suppliers and to optimize the production process. Besides, confronted to the increasing demand, the traditional network of small farmers who used to supply the company for decades cannot suffice any more. Wilju also owns some milk farms but they contribute only marginally to the needs of the company. The international experts recommend to totally outsource the supply of milk (in order to reduce the fixed costs and the risk of a surplus, when the market is seasonally at its low) and to extend the supply to new providers through a competitive and systematic process based on Key Performance Indicators (KPI), including notably:

-a bacteriological test of the milk when collected by Wiliju trucks
-a temperature monitor inside the containers of the trucks and the storage rooms, with an automatic recording and a signal in case of any variation exceeding 2 degrees Celsius and any power interruption
-a test of the fat content of the milk when collected
-a test of the viscosity rate of the milk when collected (to identify any attempt to mix the milk with water)
-a test of the protein content of the milk when collected, which is extremely important for the infant dairy products, using the Kiedhal & Dumas Method.
Based on this KPI battery, each supplier is awarded a monthly score. Below a given score, the supplier will be sent a ‘Warning’ and, after 3 repeated ‘Warnings’ will be automatically discontinued.
In parallel, the UHT (Ultra High Temperature) Tetrapak process for the liquid milk products prevent any risk of bacterial contamination during the packaging process. A tracking system enables to follow up any product during its delivery to the distributors and to ensure that no product is delivered before its shelf life deadline.

This whole reorganization costs around 20 million USD. Wiljiu is now up to the best international standards, be it for the bacteriological quality or for the nutritional properties of its products. Advertising campaigns communicate intensively on the safety and on the nutritional qualities of Wiliju products, especially for the dairy products for infants. In 2008, an international audit conducted by IDPA (International Dairy Products Association) is highly positive.

However, a few months later, a mysterious epidemic strikes young babies with renal calculi and several deaths occur. Between May and September 2008, thousands of children in Inner Mongolia got sick and had to be hospitalized all presenting the same symptoms. An inquest from the Ministry of health soon establishes that all the concerned children were fed with the ‘Kidfastgrow’ milk of Wiliju. The fatal illness is caused by Melamine crystals and the analysis of the Kidfastgrow products shows that they contain Melamine. With a chemical formula of C3H6N6, Melamine is a kind of plastic used to make white goods (for instance plastic spoons, plates, cups, etc.) and is usually supplied as a white powder. Melamine was considered as safe (with no carcinogenic risk) when used for this kind of goods but, of course, had never been studied in case of ingestion.

It soon became obvious that some milk suppliers were adding Melamine to the milk in order to artificially increase the protein content when measured with the Kiedhal & Dumas Method. The very nature of Melamine molecules C3H6N6, as aminoplastes made them very similar to proteins. Adding Melamine powder was a cheap way to achieve the « best test-tube milk ».

Questions:

Why is the Melamine scandal linked to the methodology of quality control and to the KPI implemented by Wiliju? In what ways the observation methods can impact on the reality of the observed facts?
Why is it paradoxical?

Answer 1

Outsourcing a work brings a lot of responsibilities along with it. The company outsourcing the work should take care of the fact that all the requirements are met and there is nothing wrong in the product. Further, if anything hazardous is found in the product, then the company should ask the supplier to take care in future. But when the irresponsibility is on the part of the parent company, then the supplier cannot be blamed. In this situation the amount of Melamine should have been checked beforehand to prevent any problem to the customer who is regarded as the ultimate boss. The company should have told it suppliers well in advance about the maximum amount of a particular chemical to be added in milk. And failure to comply with the guidelines might lead to discontinuity. This way, the suppliers would have been careful in advance and would not have made such a blunder. The key performance indicator regarding Melamine should be added to the present KPIs so as to ensure that the suppliers get a clear picture of what has to be done. The company can add that the amount of melamine will have to be checked while receiving the product from the suppliers. A particular percentage of melamine should be allotted to ensure effectiveness. The company should have analyzed the harmful and the after effects of excess of a particular chemical. It is always better to be ready for the worst situations. If this would have been a real situation, then the company as well as the supplier would have to give heavy compensation. The situation is really paradoxical because it is an extreme situation of negligence on the part of the parent company and the supplier. This would have been taken very seriously in the eyes of law as well as the society. Hence, these types of negligence should be avoided and there should be proper checks and balance method.