Effective Retailer-Manufacturer Collaboration Is the Key

WASHINGTON, D.C. – The Grocery Manufacturers Association (GMA), Food Marketing Institute (FMI) and GS1 US today issued a joint industry report that identifies opportunities and methods for improving product recall management practices across multiple dimensions. The report, titled Recall Execution Effectiveness: Collaborative Approaches to Improving Consumer Safety and Confidence, was conducted by Deloitte Consulting LLP on behalf of GMA, FMI and GS1 US and makes recommendations in three main areas: communication and collaboration; processes, organization and metrics; and technology. The study is part of an ongoing, industry-wide effort to improve product safety and recall programs.

“Consumer confidence is the foundation of the food, beverage and consumer products industry. Without it, nothing we do is possible,” said Pamela G. Bailey, president and CEO of GMA. “That means prevention is our first line of defense when it comes to product safety. Our industry-wide culture of continuous improvement prompted this study to ensure that recall processes are as efficient and effective as possible.”

The report findings are based on a thorough Deloitte evaluation of current and leading recall practices utilized by consumer product manufacturers and retailers, including survey responses from 54 companies representing $152 billion in manufacturer sales and $329 billion in retailer 2008 annual sales, and 29 interviews with industry executives (15 manufacturers, 10 retailers and four service providers).

Among the report’s recommendations is a call for more collaboration among trading partners to enable early identification of possible problems by sharing and investigating consumer complaints, a spike in which could be symptomatic of a problem. The report also suggests investigating the root cause of recalls to further assess prevention measures that can reduce or limit the need for recalls.   

“The report emphasizes communication as a critical component to improving recall processes among trading partners,” noted FMI President and CEO Leslie G. Sarasin. “It is equally important that we enhance our ability to communicate with the public to ensure that consumers get the information they need. Prompt, accurate and transparent information is a key element of communication that will move the entire industry forward in our shared goal of safeguarding consumers.”

When it comes to recall processes, organizations and metrics, using standardized industry tools and processes whenever possible will enhance recall efficiency, according to the report. Investment in employee recall execution training at both the corporate and the store level was also identified as an opportunity for improvement.

“Defined processes are obviously important components of recall management, but if your people aren’t adequately trained on them, they can’t execute them very well,” said Deloitte’s Adam Mussomeli, U.S. supply chain and operations practice leader for consumer products. “Our research revealed opportunities for companies to provide comprehensive, cross-functional training to ensure their recall processes operate as efficiently as possible. One way to do that is to implement a company recall execution certification program.”

Finally, the report identifies technology as the means of supporting its communication and process-oriented recommendations.

“Companies have an opportunity to elevate their recall execution performance by more fully integrating and automating the flow of critical information – both within and beyond their four walls,” Bob Carpenter, president and CEO, GS1 US said. “Rapid Recall Exchange is a game-changer with its ability to facilitate and expedite communication in a situation where every second counts.”

To read the complete report, Recall Execution Effectiveness: Collaborative Approaches to Improving Consumer Safety and Confidence, please visit www.gmaonline.org/publications or www.fmi.org or www.deloitte.com.

About GMA
The Grocery Manufacturers Association (GMA) represents the world’s leading food, beverage and consumer products companies. The Association promotes sound public policy, champions initiatives that increase productivity and growth and helps ensure the safety and security of consumer packaged goods through scientific excellence. The GMA board of directors is comprised of chief executive officers from the Association’s member companies. The $2.1 trillion food, beverage and consumer packaged goods industry employs 14 million workers, and contributes over $1 trillion in added value to the nation’s economy. For more information, visit the GMA Web site at www.gmaonline.org.

About GS1 U.S.
GS1 US is a not-for-profit organization dedicated to the adoption and implementation of standards-based, global supply chain solutions. More than 200,000 businesses in 25 industries rely on GS1 US for trading-partner collaboration and for maximizing the cost effectiveness, speed, visibility, and traceability of their goods moving around the world. They achieve these benefits through GS1 US solutions based on GS1 global unique numbering and identification systems, bar codes, Electronic Product Code-based RFID, data synchronization, and electronic information exchange. GS1 US also manages the United Nations Standard Products and Services Code® (UNSPSC®). www.GS1US.org.

About Deloitte
Deloitte refers to one or more of Deloitte Touche Tohmatsu, a Swiss Verein, and its network of member firms, each of which is a legally separate and independent entity. Please see www.deloitte.com/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu and its member firms. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries.