Supply chain summary: Recall legislation lacks consensus for best approach
By Manufacturing Business Technology Staff -- Manufacturing Business Technology, 5/28/2008 2:54:00 PM
Supply chain execution specialist RedPrairie Corp. recently put forth results of its 2008 survey of industry leaders on the impact of legislation regarding recalls as recently proposed by U.S. Congress. The RedPrairie survey of retailers; grocers; consumer packaged goods (CPG) companies; food & beverage (manufacturers; and third-party logistics providers (3PL) focused on whether industrywide standards or new legislation would have more of an impact in preventing and managing recalls.
Tom Kozenski, VP of product strategy for RedPrairie, says results indicated a lack of consensus as to whether industrywide standards or legislation would prove more effective. For example, while 79 percent of respondents indicated that recall legislation is needed, 75 percent believe industry standards would be more effective in managing recalls than legislation. In addition, the survey found:
• 56 percent of respondents were not aware of the proposed legislation, however, half of the respondents aware of the legislation are preparing for it.
• 79 percent indicated recall legislation was needed, but only 12 percent believe recall legislation would significantly reduce the incidence of product recalls.
• 75 percent of respondents believe industrywide standards would be more effective in managing recalls than legislation.
• Brand protection (46 percent) was listed as the top reason companies want to improve recall processes and technology. The next two major factors were consumer demands (36 percent) and competitive differentiation (13 percent).
“It is surprising to find 56 percent of the respondents weren’t aware of the legislation, given the recent increase in recalls,” says Kozenski. “However, we’ve found that companies are very much aware of the problem and seeking solutions. We’ve seen an uptick in the number of companies—especially in the retail, food & beverage, and CPG industries—that have asked us to help them improve their quality assurance and recall capabilities. The challenge will be discovering the right combination of industrywide standards, legislation, and individual company efforts that will effectively manage quality issues without also making a negative impact in supply chain efficiency.”
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