|Source: Wall Street Journal|
By now, you all know the story of actress-turned-entrepreneur Jessica Alba. Four years ago, she co-founded The Honest Company. The firm aimed to provide families with eco-friendly products such as diapers and cleaning supplies that would not be harmful to children. The Honest Company enjoyed remarkable success, skyrocketing to a valuation of $1.7 billion as of August 2015. Now the Wall Street Journal reports that the firm may have some problems with one of its products. The newspaper explained:
One of the primary ingredients Honest tells consumers to avoid is a cleaning agent called sodium lauryl sulfate, or SLS, which can be found in everyday household items from Colgate toothpaste to Tide detergent and Honest says can irritate skin. The company lists SLS first in the “Honestly free of” label of verboten ingredients it puts on bottles of its laundry detergent, one of Honest’s first and most popular products. But two independent lab tests commissioned by The Wall Street Journal determined Honest’s liquid laundry detergent contains SLS.
The company has objected to these conclusions. Here is where it gets very interesting. The Honest Company showed the Wall Street Journal a certificate from its supplier, indicating that the laundry detergent had zero SLS content. The supplier, Earth Friendly Products LLC, told the newspaper that they obtained the document from their supplier, Trichromatic West Inc. The Wall Street Journal contacted that chemical supplier. Here is what the firm told the newspaper:
"Trichromatic told the Journal the certificate wasn’t based on any testing and there was a 'misunderstanding' with the detergent maker. It said the 'SLS content' was listed as zero because it didn’t add any SLS to the material it provided to Earth Friendly and 'there would be no reason to test specifically for SLS.' It said the product in question 'was fairly and honestly represented' to its customer. Honest said it didn’t deal directly with Trichromatic and declined to comment further on the certificate. Earth Friendly reiterated that it relied on Trichromatic to test the ingredient."
What's the lesson here? Companies need to have visibility deep into their supply chain. They need to understand precisely how their product is being manufactured and provided to them. Such visibility proves especially important if a firm is making claims to consumers about how healthy, eco-friendly, organic or otherwise "good for you" those products are. A company selling to end users cannot simply rely on its direct supplier to monitor and control other suppliers effectively. If there's ever a good lesson for every supply chain professor to teach, here's one that certainly fits the bill.