Poor quality products, an unsafe work environment, or failure to comply with regulations ranging from product safety to social responsibility, can cause business disruption, financial loss, costly lawsuits, and long-lasting damage to the brand and corporate image of organizations that are dependent upon supply chain vendor performance. In the extreme, a brand, or even a company's reputation, can be damaged irreparably.

The crisis-catalyst may originate during any step in the supply chain process, from design to raw materials, to production, or transportation. Most often the issue centers on substandard materials or how well components or finished goods were designed and produced. Recently, company reputations have been damaged by substandard social responsibility practices of suppliers, even when the product quality was acceptable.

The quality management policies and practices of suppliers must be aligned with the standards of the company branding or selling the product. These quality management practices should also be aligned with accepted international standards. This is because failures in the supply chain are passed down the line to the firms ultimately marketing the products. Such failures can result in consumer dissatisfaction, regulatory noncompliance and, in some cases, public criticism of the corporate management practices.

 …