Global Economy Driving Recall Sprawl
According to the ExpertRECALL Index, the fourth quarter of 2013 showed an increase in a number of critical data points underscoring that the recall industry is more complex and challenging than ever.
According to the ExpertRECALL Index, the fourth quarter of 2013 showed an increase in a number of critical data points underscoring that the recall industry is more complex and challenging than ever. Among the factors contributing to this “recall sprawl” were geographic expansion, an increase in international recalls and numerous large-scale events—some of them with deadly consequences.
While the overall number of FDA regulated recalls decreased in the fourth quarter of 2013, this drop masks an explosion in complexity and geographic reach. Thirty-five percent of pharmaceutical, medical device and food recalls affected at least two countries. Within the medical device industry, over 70 percent of the international recalls affected countries in Europe and approximately 40 percent affected the Asia Pacific and/or Australia/New Zealand regions. The number of global recalls in the pharmaceutical industry also increased, growing by 14 percent from the last quarter.
In addition to international expansion, FDA regulated recalls also experienced a surge in nationwide events in the fourth quarter. Eighty-one percent of documented pharmaceutical recalls affected consumers throughout the U.S.—the largest number of nationwide recalls tracked in the last seven quarters. This trend of geographic expansion is also reflected by recall activity within the food industry, with the number of nationwide events increasing by 27 percent from the prior quarter.
“The fourth quarter ExpertRECALL Index underscores that the complexities of recall management cannot be measured solely by the number of events,” said Kevin Pollack, Vice President of Recalls, ExpertRECALL. “In addition to geographic complexities, the fourth quarter also saw the U.S. government shut down for two weeks in October. The industry experienced the fewest recalls reported in the last year and a half during that month, suggesting that changes to the political climate can further complicate recall management.”
The number of affected units is another factor that impacts recall execution, as evidenced by the recalls initiated by the Consumer Product Safety Commission (CPSC) in the fourth quarter. Sixty-nine products were recalled, representing the second lowest number of recalls the category has experienced in seven quarters. Despite this decrease in the number of events, the amount of recalled units surged by 292 percent from the prior quarter. This underscores that manufacturers must have surge capacity in order to efficiently handle the challenges of such large-scale events.
The complexity of a recall is also determined by any adverse impact on consumers, as evidenced by recalls of children’s and infant products in the fourth quarter. There were eight events in this category, down 33 percent from the prior quarter and representing 2013’s lowest figure. This downward trajectory belies the fact that two children died as a result of one of these events, which affected 600,000 units in total.
Food products recalled by U.S. Department of Agriculture (USDA) in the fourth quarter also reflect the broader recall trend of increased complexity. While there were just 19 recalls in the fourth quarter, the amount of pounds recalled nearly doubled when compared to data from the first months of 2013. During the latter period, approximately 450,000 pounds of food were recalled but, by the fourth quarter, that number surged to 860,000. This represents a 91 percent increase in poundage, and further demonstrates the challenges of recall management.
“The trends documented in the final months of 2013 are just a few of the elements giving rise to ‘recall sprawl,’” continued Pollack. “In this environment, it’s critical that manufacturers understand these challenges and are prepared to address their unique requirements. With consumer safety and brand reputation at stake, companies simply cannot afford to misjudge the complexities of global and nationwide recall management.”
About the AuthorPatrick Burnson, Executive Editor Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at [email protected]
Subscribe to Logistics Management Magazine!Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
Start your FREE subscription today!
The Future of Retail Distribution Navigating the Reverse Supply Chain for Connected Devices View More From this Issue