Product recalls owing to faulty batches of products, defective parts, contaminated batches and other defects hurt just about every manufacturing sector and cause often massive losses. Not only does the recall process cost companies big bucks, it impacts the brand credibility amongst consumers.
According to the Grocery Manufacturers Association in the US, the financial impact of a recall is quite significant: 52% of all recalls cost over $10M and 23% cost over $30M.
What is more significant is the loss of trust among consumers.
Regulatory processes are complex and demand intricate management technologies. When large supply chains run the risk of a product recall, effective technological procedures need to be implemented by brands to efficiently recall a product or a batch in the shortest timespan span possible with minimal impact to the supply chain and operations.
Traditionally, most brands or manufacturers that have had to carry out a product recall make an announcement of the recall and make a request to customers in possession of a recalled product to return it. However, tracing down product units impacted by a recall is challenging so is identifying them for consumers.
Digital product recall management using the Internet of Products driven digital “instances” of products accessible over the internet can help offer a more efficient way to flag products marked for recall and help consumers, as well as those in the supply chain, identify whether the products they have purchased are among those flagged for a recall.
FDA Recall Scanner is one such application which supplies consumers with a means to scan barcodes on their products prior to purchase or post-purchase to identify if their specific serial instance is among those flagged for recall in the FDA database.
This facilitates the identification of products that are flagged for recall and makes it easier for consumers to keep an eye out for items that are known to be defective or unsafe for consumption before any harm is done. The solution is based on two key actions.
- The ability for the manufacturer or brand to mark or flag items on a batch level, case level or serial instance level which need to marked as recalled products.
- The ability for the consumer side application to check the product’s barcode or unique identifier against its digital record on the internet and convey to the user whether it’s marked for recall or safe to purchase or consume.
In 2011 the Grocery Manufacturers Association (GMA) in the US surveyed 36 major international companies active in the food sector. More than half the companies (55%) had experienced a product recall event in the five years prior.
If we talk about the food industry, recall becomes even more critical given the health risks that are associated with it. More than that, with the emergence of a global supply-chain today, product recall has become even more critical.
According to the figure below, factors like contamination and incomplete or incorrect labelling constitute the most common reasons for a brand to recall their food products. Something as minor as a spelling mistake on packaging can render entire batches useless, which then need to be either replaced or refunded.
Source: Swiss Re: Food Safety in a Globalized World