Supply Chain Management Discipline, College of Business, Victoria University, Australia
School of Engineering and Information Technology, Federation University, Australia
Nowadays, product recalls have become an inevitable problem striking companies and manufacturers. If no sufficient preparation is made, product recalls can easily affect the bottom line. The objective of this paper is to analyse product recall notices and identify major issues of recall such as types of recalled products, causes of recall, recall initiators, and the relationship between products, recall initiators and causes of recall. This research provides an in depth analysis of recalls patterns through content analysis of historical recall notices. Analysis shows most food items are recalled due to manufacturing fault, for electrical appliances major causes of recall are design fault, and kids’ products are recalled due to design and manufacturing faults, and for all types of products most recalls are initiated by the manufacturer. The result of this research will help manufacturers look at the root causes of recall and find solution to the quality issues of product design and manufacturing. This research can be further extended to incorporate data from various countries.
Keywords: product recalls, reverse logistics, causes of recall
It would be expected that in today‟s world, with cutting-edge technology and research and development, defective products could be minimized if not eliminated. In fact, modified competitive, technological, social and political circumstances have magnified the potential impact of operations-related failure (Lewis, 2003). This has made product recalls inevitable in recent times.
Though manufacturers use state-of-the-art operations philosophies, tools and techniques, it is difficult to make the perfect product, and products often need to be recalled. Recalls are a consequence of bad quality products of which the manufacturer was not aware or did not address before distribution and sales. A good example is the large number of car recalls carried out by Toyota in 2009 and 2010 due to floor mat and sudden acceleration problems, which resulted in high recall costs to Toyota and its supply chain members and stakeholders. This recall not only incurred huge litigation fees, but also resulted in estimated losses in billions of dollars of lost sales (Marucheck et al., 2011).
This study focuses on content analysis method as a research tool. Our unit of analysis is archival product recall notice. Content analysis is a research technique that enables inferences to be made based on a text considering the context in which it was written (Krippendorff, 2004). The method basically includes two separate though usually integrated approaches, namely qualitative and quantitative content analysis (Krippendorff, 2004). Qualitative content analysis demands meticulously reading each document, and understanding and interpreting the text in its relevant context. On the other hand, quantitative content analysis summarizes the inferences and insights derived from the qualitative phase in the form of numerical examinations of the interpreted text units and the related categorized codes (Krippendorff, 2004). The study utilises qualitative and quantitative techniques in an integrated manner. We use the following content analysis steps: (1) locate source of historical recall data (2) collect recall notice, (3) search recall notice element information, (4) code and analyse frequency of relevant qualitative data.
This research considers product recalls as an inevitable problem for supply chain members and emphasises an understanding of recalls. Through a comprehensive literature review on product recalls, we propose a generic recall process and conduct an in depth analysis of historic product recalls.
This study focuses on recall data in New Zealand. We identify the frequency of product recall incidents for different types of products; who initiated the majority of recalls, the main reasons of recall, and relation between recall initiators and causes of recall. We find the majority of recalled products are food items, electrical appliances, and kid‟s products. Recall data shows major recalls are due to product design flaw, manufacturing fault, and mislabelling. Analysis also shows most food items are recalled due to manufacturing and labelling faults, and for electrical appliances major causes of recall are due to design fault. This gives an important indication that in order to overcome and prepare for a possible product recall; measures should be started from the beginning stages of product design up to the production process of the product. Even with sophisticated product design technology, and six sigma quality target, it is still unlikely manufacturing companies will always produce defect-free goods.
Kamrul Ahsan, PhD is a senior lecturer in supply chain management, at the College of Business, Victoria University, Australia. His current research areas include reverse logistics, humanitarian logistics management, sustainable procurement, supply chain integration and project performance management. Dr. Ahsan has been increasingly recognized by the research and professional community and his publications have appeared in many peer-reviewed journals. Recently, he has received the Project Management Institution New Zealand (PMINZ) 2011 research achievement award. His co-authored article on remanufacturing was selected as best paper award in the 21st International Conference on Production Research (ICPR 21), 2011 in Stuttgart, Germany. He is on the editorial board member of several international supply chain and project management journals.
Indra Gunawan, PhD is a senior lecturer and coordinator of Maintenance and Reliability Engineering Programs, School of Engineering and Information Technology, Federation University Australia. He obtained his PhD in Industrial Engineering from Northeastern University, USA. His main areas of research are reliability engineering, production and operations management, application of operations research, applied statistics, probability modeling, and project management. His work has appeared in many peer-reviewed journals and international conferences.