China executed people responsible for adding an industrial chemical to baby formula [1]. Without debating the merits of capital punishment, I think the issue is the lack of consistency in supple chain management. The only model I could compare to would be Costco, who is pretty good at curating products customers will like (and the quality is usually good IMHO). Trust sells, if you find buyers who value trust.

[1] https://www.theguardian.com/world/2009/nov/24/china-executes...

China executed scapegoats after huge internal outrage and an attempted coverup.

Not the kind of thing that builds trust.

I don't know whether they were just scapegoats. But if we assume the worst, that they were, it's still a big cost. Having to find scapegoats to pin the blame on while keeping morale of other employees up, I'd imagine that isn't easy. People will be scared. They will wonder whether they are next in line for scapegoating. They will try their best to stay away and cover their asses. It will raise costs to the point that no one will try this again.