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On Risk Management, Business Continuity, and Security
23 April, 2017
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How To Put Yourself Off Dinner

A fast-food restaurant is not a good place for a discussion on risks. Common industry practices can amplify otherwise miniscule risks, and the restaurant owner may well be the victim of the risk management practices of his suppliers.

A breakfast meeting in a fast food restaurant set me thinking about the unusual risks such establishments — and the companies which own or franchise them — face.

In a previous article on this topic (It's Enough To Put Yourself Off Lunch) I discussed how a system for feeding cows with a positive feedback loop ensured that what might have been an isolated incident would become a major crisis (BSE or Mad Cow Disease). I also noted that the risk management decisions of suppliers will generally be in their best interest, not your best interest.

Bad publicity for your suppliers can also mean bad publicity for you. As of the time of writing, the KFC website contains a statement trying to minimize the damage caused to them by a videotape of the employees of one of its suppliers, Pilgrim's Pride, abusing chickens. While KFC may not be the only fast food company supplied by Pilgrim's Pride, and Pilgrim's Pride may not be its only supplier, KFC in this case has the disadvantage of instant name brand recognition.

Of course, if you're not happy with a supplier you can always change them.

But there are some things that are industry wide. Consider, for example, the use of growth hormones in cattle. Currently the use of growth hormones is banned in the European Community, but permitted (and widespread) in America. Protectionism or a legitimate public health concern? Given the time it takes for some types of problem to surface, (how many drugs are recalled after years on the market?) it's difficult to argue that anything is provably safe. Is there a long term effect on public health which has yet to be detected? Could the desirability of American beef and milk change overnight following a new scientific study?

If you have the market clout, it makes sense to be cautious. Can you diversify your supply, using suppliers in different countries with different systems and regulatory regimes? Can you eliminate (as McDonalds has announced it will do) antibiotic growth promoters? Can you go further and eliminate growth hormones? That might leave you with an acceptable supplier if the use of growth hormones was proved to be a health hazard. Can you ensure that some of your suppliers use grass-fed as opposed to grain-fed beef?

What happens if an infected cow makes its way into the food stream? In his book, Fast Food Nation, Eric Schlosser points out that a hamburger bought at a fast food restaurant may be made from parts of more than 100 cows. In an interview on the DVD of the film Supersize Me, he notes that a contact at the CDC informed him that the actual number is nearer 1000.

This is not good news for lovers of elementary probability theory.

Suppose there are a million cows and one of them is sick. If I choose a cut of meat I have a one in a million chance of choosing meat from the sick cow. I'm probably happy with those odds. But if when producing hamburgers the meat from 100 cows is combined, then my chances of eating a hamburger from a sick cow just jumped a factor of 100. If, as Eric Schlosser's informant at the Center for Disease Control suggests, the figure is more like 1000, then my chances of eating part of the sick cow in my next hamburger are now 1,000 in 1,000,000 or 1 in a 1,000. These are not good odds. You would not cross a road every day if there was a 1 in 1,000 chance that a car would hit you. Small wonder that Eric Schlosser tries to avoid hamburgers.

While a process which amplifies a problem is not as bad as one containing a positive feed back loop, it clearly is a cause from concern. From a risk prevention perspective each hamburger should be made from one cow, and better still from one part of one cow. From a personal perspective, I like the approach I've seen in France here. If you want ground beef, you choose a cut of beef and the butcher places it in a grinding machine and produces your ground beef to order. You know the meat came from one cow and you know which cut it came from. You also know the meat came from a cow tested for BSE. (Every cow is tested in France) It's hard to beat this approach in terms of risk minimization.

What other unusual risks should a fast food company worry about?

Becoming featured on “America's Most Disgusting Videos” or some similar program must surely be one of them. It only takes one staff member (or the employee of one franchise) to behave badly and the whole chain is at risk. While horseplay may be tolerated in some companies, if it affects the hygiene it is not.

Until recently, I would not have identified dietary changes among the risks. The sudden rise in popularity of the Atkins Diet has a lot of fast food chains struggling to develop menu items that are “low in carbs”. Whether this is a long term change, or whether it will not last much longer than the average person's attempt at a diet remains to be seen. But some companies are already blaming poor financial figures on the popularity of the Atkins Diet, so perhaps permanent changes in your customer's dietary preferences are something you need to worry about.

Fast food restaurants have all the other risks that retail and distribution chains face, with the extra concerns that most of the products have a very limited life span, must be refrigerated, and can spoil in ways that are not obvious to the naked eye.

And finally, I have some very bad dreams about food tampering and terrorism. But I don't think it would be helpful to describe them here. They are definitely bad enough to put you off your dinner.

Michael Z. Bell
November, 2004

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