Almost 72 percent of senior supply chain and operations executives indicated in a recent study that they are not completely confident in their organizations’ product recall and traceability methods. The study, released by RedPrairie Corporation, surveyed supply chain and operations executives from 130 consumer product goods, life sciences, and food and beverage companies to identify their capabilities in tracking, tracing and recalling products up and down their global supply chains.
Additional findings include:
• More than half of executives are concerned about their ability to isolate items with their own supply chain.
• Coordinating recall issues with suppliers and distributors is a real concern for almost 70 percent of executives surveyed.
• Only 51 percent of organizations are able to execute a product recall within hours.
• Less than 20 percent have deployed traceability technology solutions to help fully-automated trace and recall processes.
• Forty-six percent say their companies are struggling to stay compliant with regulations.
• Almost one-third of executives were most concerned that their ineffective ability to trace items would have a negative financial impact on their company. Almost 25 percent of them also cited negative brand reputation as a pressing concern.
• Eighty-six percent are worried about their financial liability if something goes wrong with a product recall process.
“Despite all the challenges and concerns associated with product recalls, what surprised us most in this research was that almost 30 percent of executives claimed to be very confident in their ability to trace items across their supply networks,” said Dave Bruno, RedPrairie marketing director. “Given the low-levels of technology adoption to help automate the processes and facilitate collaboration across suppliers and distributors, this confidence could potentially be misplaced.”
A key challenge with recalls has been a lack of standards. GS1, a not-for-profit organization that designs and manages a global system of supply chain standards, announced this week the ratification of a new global product recall standard, along with an implementation guide for multi-jurisdictional recall notifications.
This new standard serves as a blueprint enabling all supply chain stakeholders to implement more effective product recall processes and notifications. The standard defines, standardizes and harmonizes the critical attributes to be captured and shared among trading parties and regulators during a product recall alerting and messaging process.
The standard complements and extends the existing GS1 Traceability Standard that provides companies with a well-defined traceability process to meet regulatory requirements, building upon existing GS1 standards that are widely used in most supply chains around the world. It is incorporated into country-specific, GS1-standards based recall platforms, including Rapid Recall Exchange in the United States. Users of this service do not need to make changes to their processes to take advantage of the new standard.
Food safety is a particular concern. According to a 2010 report from the United States Centre for Disease Control (USCDC), there are 48 million cases of food borne illnesses each year in the U.S. with 150,000 hospitalizations and 3,000 deaths.
“The GS1 Product Recall Standard will enable manufacturers, retailers and suppliers to work more closely together,” said Daniel Triot, market logistics leader at Procter & Gamble. “By leveraging a system of global supply chain standards that we all know and use today, product recall will become a function that is embedded into all our global supply chains.”