Published: 30-Mar- 2011 | Product Category: Risk Consulting Services
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Why have product recalls increased?
While there are several theories to explain why product recalls have become more prevalent in the 21st century, the most common include:
1. Foreign Imports –
Significant increase in outsourcing to countries with lower manufacturing and safety standards in an effort to reduce production costs
2. Public Awareness –
Increased media coverage of product recalls, heightening societal awareness of consumer product safety issues frequently resulting in ‘ripple-effect recalls’
3. New Science and Technology –
Increasing numbers of technical and design failures and/or faulty safety inspections as a result of the use of science and technologies that have not been fully tested
4. Reputational Concerns –
Proactive responses to product safety issues by organizations in an effort to preserve established corporate profiles and brands
5. Regulatory Scrutiny –
Governments around the world have increased the amount of product safety legislation as well as their policing efforts
Why should organizations be prepared for product recalls?
Product recalls can have an impact on all parts of the supply chain, from the manufacturer, to the importer, to the wholesaler, to the retailer. Each piece of the chain needs to be prepared to respond to the recall, whether it is to comply with the recall order to stop selling or importing a product, or a more complex response required by the manufacturer of a recalled product.Obviously, compliance with regulatory requirements is of paramount concern to most organizations, but there are additional benefits to investing in a comprehensive product recall program. While consumer product issues are challenging for most organizations, the existence of a well-developed response strategy, in advance of a potential recall, can produce valuable organizational opportunities.