Regulatory and corporate compliance management standards vary significantly from one industry to the next; affecting business, and the public, in major ways. While one issue of non-compliance could break an entire firm, it doesn’t always necessarily mean the end. It could also serve as a warning to shape up, in order to escape rougher times ahead. This depends entirely upon the industry and the compliance issue at hand.
Members of a supply-chain, for example, could cause shipping delays from failing to comply with industry standards. This first initial consequence noticed by a business could be just one of several detrimental effects, which tend to snowball. Once a delivery is delayed, and others begin to catch wind of the compliance issue, the results could be detrimental to an entire industry or country.
Non-compliance can cause a variety of issues, from delays in shipping, to destroying the reputation of a brand or product. It could cause the quality of goods delivered to decrease, and for customers to start questioning reliability. Once customers stop putting their faith in a brand to deliver quality on a consistent basis, the entire industry could be headed for a world of trouble. Non-compliance at its worst can cause a person their health, or life. Often times, a non-compliance issue will turn viral, and spread mistrust in consumers on a grand scale.
Many examples of this pertain to food safety concerns. One recent case occurred in 2014 when a Chinese meat supplier, Shanghai Husi Food Co., was caught selling expired meat to large corporate restaurant chains such as Yum Brands, McDonald’s, KFC and Pizza Hut. The corporations halted their meat purchases from the company and began purchasing meat from Thailand instead. This incident hurt not only the company, but meat revenues for the country of China and Japan for an entire year. Japan’s struggle with food safety compliance in 2015 saw a decrease in meat revenues by 40%. Much of this has to do with the expired meat that was purchased from the Chinese company by McDonald’s, as well as several other issues discovered at various McDonald’s chains across the country.
Another incident which had a lasting effect on an entire industry happened in 2003 and 2006, with two separate scares caused by contaminated scallions in the United States. In 2003, scallions from Mexico which were imported by Chi-Chi’s were contaminated with Hepatitis A. This cost 4 people their lives, and another 600 people to become ill. The restaurant chain has since closed, but another scare occurred in 2006 when green scallions served by several Taco Bell chains were found to be contaminated with E. coli. This incident caused over 20 people to become ill, and for Taco Bell to remove scallions from their menu permanently from 5,800 restaurants. Not only did these two restaurant chains remove scallions from their menu, but several other corporate chains followed suit, and many still—to this day—do not serve scallions on their menus.
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