More than half of senior supply chain executives say their company could not conduct a product recall within hours, and would expect the process to take days or weeks instead, according to a new study from RedPrairie Corporation.
According a poll of 129 senior supply chain and operations executives in the food, beverage, consumer packaged goods, and life sciences sectors, 51.6% said a product recall would take days or weeks, rather than hours, and nearly half (45.7%) said they would be unable to isolate an affected product without impacting other items or lots. The survey was carried out on behalf of RedPrairie by Gateway Research.
"Costing on average $10m, product recalls are understandably any company's worst nightmare," said Simon Ellis, practice director, Supply Chain Strategies for IDC Manufacturing Insights.
That figure is from a recent industry report sponsored by the Grocery Manufacturers Association and the Food Marketing Institute, among others. However, it does not include brand damage or lost sales, not to mention the human costs of illnesses associated with some recalls. Eighty-six percent of respondents said they were worried about their company’s financial liability if something were to go wrong with a recall.
"New legislation adds increasing complexity to the challenge of successfully executing traceability programs,” Ellis said. “Technology solutions that help to isolate products, proactively issue alerts and handle inventory reconciliation will be key to avoiding the negative outcomes of a poorly executed recall."
Meanwhile, most executives (94.5%) said they were somewhat or very confident of their ability to trace products across supply chains – but less than 20% have traceability technologies in place to help fully automate the recall process.
However, a majority (55%) said they did intend to upgrade their traceability capabilities within the next five years.
The full study, On the Trail to Traceability, is available for download here .