Complexities of Supply Chain Interdependency Revealed in New Recall Study

With highly publicized recalls affecting millions of consumers, the first quarter of 2015 stood out for the rippling effects many of the recalls had throughout the supply chain, says a new study.

In that light, the Q1 2015 Stericycle Recall Index looks at the multiplier effect, a scenario in which one recall event drastically expands over time multiplying to other manufacturers, products, regulatory bodies and geographic locations.

When the same supplier, ingredient or component is utilized across multiple companies and products, the overall impact of a recall is staggering. The complexities of supply chain interdependency become an unfortunate reality that companies must face head on.

“The top trend we saw during the first quarter 2015 is what we are calling the multiplier effect, where supplier issues triggered numerous recalls with multiple brands,” says Todd Harris, vice president at Stericycle.

“This led to incredibly complex recalls, mostly in the food and automotive industries, that were not only massive in size, but played out over multiple regions with different regulatory bodies, each with its own unique challenges.”

“A good example of this was the widespread recall of cumin and products containing the spice due to undeclared peanut proteins. The recall affected everything from taco kits and Cajun seasoning mixes to beef and chicken, adds Harris.”

Harris told SCMR in an interview that “the good news” is that many companies have realized these challenges and are proactively working with their suppliers to remedy this issue now and in the future.

The Stericycle Quarterly Recall Index analyzes cumulative recall data from the from the four primary federal agencies that oversee recalls in the United States: the Consumer Product Safety Commission (CPSC), the Food and Drug Administration (FDA), the Food Safety and Inspection Service (FSIS) of the United States Department of Agriculture (USDA), and the National Highway Traffic Safety Administration (NHTSA). Each quarter, the report investigates emerging trends within the recall industry and includes scorecards with key takeaways in each category.

The “multiplier effect” has impacted numerous manufacturers and consumers in recent years and was a top trend in Q1, heavily affecting the food and automotive industries. Despite the significant impact of the multiplier effect on recent recall numbers, more and more companies are taking these challenges seriously by quickly responding to issues and proactively working to enhance levels of internal and supplier product quality.

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