Two words no manufacturing organization wants to hear: product recalls. By their very nature, product recalls are unpredictable events.
The cost to a company transcends potentially expensive litigation and settlements. Product recalls and the effects that product failures have on companies that fail to conduct proper design analysis before, during, and after the manufacturing process are often unrecoverable.
The globalization of manufacturing has exacerbated this challenge. When manufacturers allocate necessary time and resources, product recalls should not happen. Recalls are not only costly for companies, but most often cause huge frustration and inconvenience for consumers.
Whether consumer harm is due to manufacturing design failures or to product failures, there is an ever-stronger force of advocates for consumers, well-versed in global manufacturing scenarios and armed with the right tools, who can help determine how to prevent costly and sometimes deadly product failures. For instance, tolerance analysis software offers manufacturers the tools they need to ensure their products come off the assembly line without defect or risk of failure. Concepts such as lean manufacturing, lean Six Sigma, and Theory of Constraints (TOC) have helped manufacturers successfully prevent the majority of product failures and product recalls for both large and small, domestic and international firms.
This year manufacturers will work aggressively to eliminate the error between predictive models and physical factory results. Ultimately, success will be measured in the prevention of costly recalls and consumer dissatisfaction or injury.
There is currently little quantitative data collected about the effect of product recalls in the multichannel environment. There is, however, qualitative research evaluating the supply chain management and retail logistics processes of manufacturing companies with global retail operations, which have online channel capabilities serving millions of customers annually. Addressing the challenges of managing the supply chain while meeting customer demand is a challenging quality task. Issues with process execution leading to decreased service to customers and increased costs to the manufacturer often drive a product recall.
Best practices in the supply chain: Toys this past holiday season
Management and the leading process-improvement methodologies reveal that the factors hindering successful supply chain management and process execution are velocity-focused operations, organization and culture, competency of staff, lack of process improvement strategies, departmental logistical collaboration, and failure to integrate supply chain best practices specific to retail.
The U.S. Consumer Product Safety Commission (CPSC) and U.S. Customs and Border Protection (CBP) joined forces this past holiday season to keep kids safe and stop dangerous toys from reaching kids’ hands. CPSC’s and CBP’s cooperative work to detect and detain shipments of toys and children’s products at ports from coast to coast helps to create a safer marketplace for consumers who are shopping for children. In addition to inspections at U.S. ports, CPSC also enforces strong safety standards and trains manufacturers at home and overseas about safety requirements.
During the past four years, CPSC and CBP stopped more than 8 million units of about 4,500 different types of toys and children’s products due to safety hazards or the failure to meet federal safety standards. Reasons for stopped shipments have included lead, small parts, sharp points, and labeling requirement violations.
The good news for shoppers is that toy recalls have continued to decline from 172 in fiscal year 2008 (with 19 involving high levels of lead), to 24 in fiscal year 2016 (with only one involving a lead violation). Toys were recalled for defects that could cause choking, mechanical hazards, and fire hazards posing a threat of injury to a child.
A new report, released last month, indicates that there were an estimated 185,500 toy-related, emergency department-treated injuries and 11 deaths in 2015 to children younger than 15 years old. Riding toys, specifically nonmotorized scooters, were the toy category associated with the most injuries and 45 percent of toy-related deaths in 2015. Most of the toy-related injuries involved cuts and bruises, with the head and face being the most commonly affected areas.
Children are the most vulnerable consumers. Stopping shipments of dangerous toys before they reach kids can go a long way to help gifts be a source of joy, rather than tragedy.
Protecting consumers from unsafe products is always a priority. Increasingly, manufacturers and multichannel merchants find that proactive advanced planning is a critically important component for brand-recovery strategy when unpredictable product recalls occur. In this social media-driven world, a brand can quickly lose communication control. Preventing product recalls is the first order of business; managing them effectively is next.