Crises in Supply Chain Management from the Calculus Milk Powder Event

In August, 2008, the outbreak of the calculus milk powder event gives rise to reflection on supply chain management, especially the crisis factors in supply chain management. Calculus milk powder event has not only brought out enormous tangible and intangible economic losses to Sanlu, but also arisen negative influence to the whole consumption and socio-economic development. Meanwhile, it also reveals the enterprisepsilas deficiency in SCM and the significance of strengthening SCM. When every link in the supply chain confronts crises, the linkage effect of crises is formed immediately, and endangers all enterprises in the supply chain. This paper studies the internal and external crises factors in supply chain management, as well as the adverse selection and morality crises under the principal-agent relationship. Meanwhile, take the Sanlu as an example to empirically analyze the reasons why crises happen in supply chain management of Sanlu. So, itpsilas time for Sanlu and all other enterprises to study and strengthen crisis management of SC.