Home > Trends and perspectives > Product safety in global supply chains

Product safety in global supply chains

Recently an interesting piece of work appeared in the Journal of Operations Management (http://www.sciencedirect.com/science/article/pii/S0272696311000945). The paper reviews the topic of product safety and security in several industries (i.e. food, pharmaceutical, medical, consumer products). A key concern of authors is that product safety becomes a major concern in our economy where most of manufacturing activities are outsourced and thus making traceability and control a real challenge. Recent cases such as Toyota massive recalls (http://www.toyota.com/recall/ , video http://www.youtube.com/watch?v=NDYou3B8-hs) or Fischer Price / Mattel ones.

In the last five years the list of product safety issues is rather disappointing.

Year Industry Incident Effects
2011 Food E.coli contamination of bean sprouts 37 people died
3.000 people sickened
210 million € for farmers aids
2011 Medical devices Balloon catheter No injuries
18.000 recalls
2011 Medical devices Surgical graft No injuries
3.000 lawsuits
2008-2011 Automobiles Toyota 9 million cars recalled worldwide
2006-2011 Notebook batteries Sony 4 million batteries
2008-2009 Food Salmonella in peanut butter 9 deaths
637 people sickened
4.000 products affected

Table: recent product safety cases (adapted from Marucheck et al. 2011)

Industrial companies have to face relevant challenges if they want to keep consumers really at the center of their strategy. From a supply chain management perspective attention should be devoted to:

  • Relative benefits of vertical integration versus outsourcing with respect to safety. Usually focus is given toward purchasing costs when suppliers have to be selected but “some low-cost suppliers are really high-cost suppliers when the expected costs of safety risks are considered” (Marucheck et al. 2011). In this light total cost (or total sourcing) models should be considered so to address product safety completely
  •  Controlling and monitoring suppliers for product safety. The adoption of certification programs and testing rules can contribute to the mitigation of product safety issues. Real-time monitoring of manufacturing provided by information technologies can be beneficial too.
  • Suppliers education. Frequently issues with suppliers are not the result of intentional violation of rules, but simply are due to lack of knowledge of the implications of certain behavior. When buyers leverage more on cooperation in the relationship instead of coercion, suppliers tend to be more compliant (Jiang, 2009). Training the supplier is an effective way in which both the supplier relationship and its compliance can be positively affected.
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