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ANALYSIS

“I think the first thing is – starting from the bottom of the supply chain – make sure that you know who you’re dealing with,” says Alan Fletcher, managing partner at Newcastle-based commercial law firm Square One Law. “By that I mean you have done your proper due diligence – not on the parties that are supplying you direct, but also their supply chain. If you are being supplied something that you are describing as from the UK, for instance, you need to be able to work all the way down the supply chain and make sure that they are all UK companies with reasonably strong financial covenants, so that you can have a degree of comfort that your description will be accurate.” Back adds: “How they do their business will, at the end of the day, reflect on your own reputation so if you don’t understand how they are doing their business, you are potentially putting yourself at risk.” However, as Fletcher admits, not even the most rigorous of checks can

bring maximum assurance, as one slip by a single supplier can domino disastrously through the supply chain. He therefore advises businesses to look a bit closer to home to further reduce the risk of things going awry. “Ultimately you are responsible, so whatever you are supplying, you do need to quality test,” he comments. “Obviously, you don’t test everything that goes out the door but you need to ensure that you have tested a reasonable percentage of the goods that are leaving your premises and I don’t think that is often done as much as much as it should be.”

CASE STUDY 1 making sure that it is perceived as a partnership rather than a contractual relationship between a supplier and a customer. Obviously, if something goes wrong along the way, it is our responsibility, but we minimise the chances of those things happening by building on relationships rather than just building on contractual positions.” A large part of Ella’s Kitchen’s innovative and admirable approach to supply-chain management is its use of the governmentbacked Knowledge Transfer Partnerships (KTP) scheme, which allows graduates and academics to manage a significant project within an organisation, with the company

Paul Lindley founder/chief executive of Ella’s Kitchen The stringent regulations governing the baby food industry place a legal imperative on those operating in it to manage their supply chain as rigorously as possible. Nevertheless, given the passion with which Paul Lindley runs his global organic baby and toddler food brand Ella’s Kitchen, the need to stick to the rules is a minute part of why he prides provenance and transparency over anything else. The strength of relationships that Lindley has built with his suppliers in all corners of the globe, and the benefits they receive from working with Ella’s Kitchen, is almost a model in ‘how to do supply chains right’. “As a relatively small company, we put a lot of emphasis on what we call ‘giving stuff back’,” Lindley explains. “We focus on

paying a third of the person’s salary (the government funds the other two thirds) for a contracted two-year period. Lindley has taken advantage of KTPs for a couple of projects, including one specifically around the supply chain. “One of the things that has come out of it is that, for our fruit and vegetables grown in the UK, we now effectively commission the planting of all the produce that we will use. We know the volume that is going to be produced and so right from the seed, rather than from the farm, it is ours. The husbandry or farming that goes on is approved by us as the food grows and gets processed and that is something that, through the KTP, has allowed us to add a greater level of sufficiency and continual improvement in the processing as well as the sourcing.”

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“As a relatively small company, we put a lot of emphasis on what we call ‘giving stuff back’” May 2013 www.elitebusinessmagazine.co.uk

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