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Business 101: Verify your sources


If you’ve ever stopped to compare the fields of journalism and manufacturing, you can’t help but notice a strange similarity. Although at first blush they bear little resemblance, there is one thread that runs through both: an undeniable dependence on reliable sources.

It seems almost self-evident, for example, that when a leading newspaper decides to publish a big story, it must first vouch for the source of its content.

And yet as obvious as that may seem to some, the same rules of common sense are getting lost these days when it comes to sourcing product for the retail market.

You don’t have to look much further than the headlines in the nation’s daily newspapers to understand the magnitude of this problem. Article after article tell a haunting tale of unknown, unreliable sources, many from the Far East, that are cutting corners in the name of squeezing out better profits.

In many cases, as in last week’s voluntary recall of billions of dollars worth of name brand children’s toys “tainted” with lead paint, American consumers can only scratch their heads as they’re left to wonder how such a monumental oversight could ever come about. I guess it’s nice to know, at the very least, that the scars were only psychological. (And in this case, there may never have been much of a physical threat—when you consider how many hundreds of Dora dolls a child would have to gnaw on for their blood lead level to reach the danger point.)

It’s too bad the same can’t be said for dog food and toothpaste.

For those with short memories, this past spring bore witness to some of the most egregious sourcing nightmares this industry has ever known. After pet owners began noticing erratic behavior in their animals, many of which perished in the ensuing days, the FDA launched an investigation into pet food sourcing, only to discover that a major Chinese supplier of raw pet-food components (sold in the U.S. under more than 50 brand names) had knowingly replaced legitimate protein stock with toxic levels of melamine scrap.

And if pet contamination doesn’t hit close enough to home, less than a month later it was discovered that a separate Chinese company (also supplying major U.S. companies) was exporting toothpaste laden with diethylene glycol, a toxic ingredient in antifreeze.

And then you’ve got Chinese catfish banned in Alabama for its alarming levels of fluoroquinolone antibiotics, or the broiler chickens from an Indiana producer that were fed pet food scraps contaminated with the foreign-sourced melamine and subsequently sold for human consumption.

Still, the worst case to date has to be the deaths of hundreds of Panamanians whose over-the-counter cough syrups (sourced by none other than the Chinese) were contaminated by profit-driven counterfeiters who replaced costly glycerin with sweet-tasting—albeit toxic—cheap solvents.

The problem with all of these cases—as tragic as many are—is that none has hit close enough to home. Despite the danger to American consumers, we still shrug off lead-painted toys and toxic toothpaste as other people’s problems—provided they don’t reach epidemic proportions.

But how much further does the abuse have to go before it can be called an epidemic. And who, ultimately, is responsible for verifying the quality of a product’s source?

Those are weighty questions to be sure—ones the FDA and the Chinese authorities will be addressing for months and years to come.

But they will also be decided by the court of public opinion, which is already growing leery of cheap Chinese sourcing. We all know what the consumer would do if these were news stories with artificial sources—he/she would stop reading altogether.

Unless U.S. companies start doing a better job of verifying their own sources, they run the very real risk of experiencing a similar fate.

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