Costly Greens: Romaine’s E. Coli Outbreak

Costly Greens: Romaine’s E. Coli Outbreak

The E. coli outbreak caused by contaminated romaine lettuce from Yuma, Arizona, killed 5 people and sickened over 200 others. The CDC stated on June 28th that the outbreak had run its course.

What are the financial effects on the supply chain?

Farmers shifted production out of Arizona into California.  Retailers cleared their shelves of the tainted greens.  Restaurants changed their menu or found new suppliers for different lettuce.  Disruptions have occurred throughout the lettuce supply chain, from farmers to consumers.

This post is based on the Fortune.com post, The financial impact of the romaine lettuce E. coli outbreak isn’t over, by Sarah Gray, May 30, 2018; on the CNN.com article, Five deaths, 197 illnesses in ongoing E. coli outbreak tied to romaine lettuce, by Susan Scutti, June 1, 2018, and on the CDC post, Multistate Outbreak of E. coli O157:H7 Infections Linked to Romaine Lettuce (Final Update), (no author cited), June 28, 2018. Image source: Author’s Image/Glow Images.

Discussion Questions:

1. How did the E. coli outbreak disrupt the lettuce supply chain?

Guidance: The disruption is found throughout the supply chain from farmers to retailers to restaurants to consumers. Consider Continue reading

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Shortages at Tim Hortons in Canada

Shortages at Tim Hortons in Canada

A supply interruption at the Guelph, Ontario distribution center left more than three-quarters of Tim Hortons’ 1,750 franchisees in Ontario scrambling to source some of the unavailable items from third-party retailers such as Walmart, instead of buying them directly from head office as part of the franchise agreements.

However, Ontario franchisees are worried about losing sales. Some of the items on shortage are Tim Hortons branded coffee and tea, and those aren’t available at Walmart.

This post is based on the Financial Post article, Buy from Walmart, Ontario Tim Hortons franchisees told, as a shortage hits Guelph warehouse, by Hollie Shaw, April 16, 2018. Image source: Erik Isakson/Blend Images LLC.

Discussion Questions:

1. Why does Tim Hortons require its franchisees to buy items directly from its head office?

Guidance: Centralized purchasing (should) enable lower costs, standardized quality, improved inventory control, and more efficient sourcing.

2. How could Tim Hortons improve the relationship with its franchises?

Guidance: Suggestions may be to decentralize purchasing for items that are non-essential to restaurant operations such as vinyl kitchen gloves and garbage bags; build long-term partnership relationship with franchisees by involving them in strategic decisions such as changing menu items.

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