Last week, The Wall Street Journal featured a novel but rather important article (Paid subscription required) reflecting on the importance of knowing your product, your supplier management and oversight practices along with supporting your core product marketing strategies.
The article reflects on actress Jessica Alba’s co-founded company, the Honest Company, whose company has soared to a reported $1.7 billion in private valuation in less than four years. The stated core mission of this consumer goods company is to offer cleaning products that do not knowingly contain harsh chemicals found in mainstream marketed and sold products.
One of the harmful compounds of question is that of sodium lauryl sulfate, referred to as SLS. The Honest Company’s claims to consumers are that its products are free of SLS. However, in its report, the WSJ indicates that it commissioned two independent testing labs to analyze Honest’s liquid laundry detergent only to determine that it contained significant amounts of the chemical.
Honest naturally disputes such findings. The firm indicated to the WSJ that its manufacturing partners and suppliers have provided assurances that its products do not contain SLS other than trace amounts, and indeed provided a document from the laundry detergent supplier, Earth Friendly Products indicating there was no SLS content in its product. Earth Friendly indicated its document that it relied on its own chemical supplier, Trichromatic West, to test and certify that there was no SLS content. That’s when this story gets interesting since the lower-tiered supply chain chemical supplier told the WSJ that its certificate was not based on any testing and that there was a “misunderstanding” with the detergent maker, its customer. Further indicated was that SLS content was listed as zero because the chemical supplier did not add any SLS to the material it provided.
Honest reportedly claims to utilize an alternative cleanser in its products that is termed sodium coco sulfate or SCS. The WSJ goes further in its research for its report, interviewing a reported dozen scientists on how SCS itself is produced. It turns out the substance is: “made from palm or coconut oil, as a mixture of various cleaning agents that includes a significant amount of SLS.” The Journal indicates that one of the country’s largest suppliers of SLS and SCS acknowledged that SCS indeed contains SLS.
Our readers can indeed read the entire WSJ report as to the back and forth communications the publication had with the Honest Company regarding the semantics of what is included in its laundry detergent product.
For Supply Chain Matters readers, particularly those of sourcing and procurement roles, the reported incident is yet another reminder of the importance of auditing and monitoring suppliers on a regular basis. It provides a further reminder in the need to have an active two-way relationship with product management and with associated product management teams to insure that the entire value-chain of a product conforms to important specifications.
Your firm can assume that the primary supplier is the sole source of product conformance to specifications and/or purpose. Many procurement teams have since discovered that in today’s complex web of value-chain stops, it is important to insure that all players clearly understand product and manufacturing process specifications, especially when supporting consumer product offerings.