Product recalls are becoming a daily occurrence, posing a serious challenge for manufacturers. From widespread listeria outbreaks to recalls of electric vehicles for potential dangerous software failures, and the widely publicized challenges facing Boeing, quality and safety failures resulting in costly product recalls are on the rise. 

According to the recent global Pulse of Quality in Manufacturing survey, 39% of respondents said that the cost to rectify one product recall ranged from $10 million to $49.99 million in the U.S. alone. Respondents cited additional impacts of brand reputation damage (35%), delayed product introductions (32%), plant shutdowns (30%) and even corporate layoffs (26%).

From food and beverage to heavy manufacturing, medical devices, life sciences and electronics industries, the quality and safety issues leading to recalls aren’t just impacting the reputations and profitability of these manufacturers — they’re having serious consequences on people’s lives. In the first six months of 2024, lead-tainted applesauce sickened at least 500 children nationwide, and cantaloupe contaminated with salmonella led to 400 illnesses and six deaths. These are just two of the hundreds of food items recalled last year.

The causes of the uptick in recalls are as varied as the products themselves. Some are obvious, such as a faulty component or the presence of a dangerous pathogen. Others are less obvious, but just as insidious, wreaking havoc and spreading fear among consumers, manufacturers and the many businesses across their global supply chains.

One factor contributing to the rise in recalls is the increasing complexity of global supply chains, and the concentration of certain parts or ingredients in the hands of a smaller number of suppliers. According to the survey, supplier issues have emerged as a key contributing factor to product recalls, with 61% of respondents claiming that up to one-half of product recalls can be attributed to supplier issues. The survey also found that the majority of respondents (70%) believe their organizations have control over their suppliers. However, many product recalls or quality and safety issues that occur are the result of a lack of visibility into suppliers, supplier quality or supply chain disruption. 

There is undoubtedly a direct link between supplier quality and product quality, and the importance of a strong, collaborative supplier relationship cannot be overstated. Cohesive, optimized supplier partnerships, managed with clear oversight, objectives and metrics, enable manufacturers to boost efficiency, quality and innovation, while reducing the risk of safety issues and costly product recalls. Following are some key strategies for achieving these goals.

Choose wisely. When selecting new suppliers, identify potential candidates based on a comprehensive set of factors, such as compliance history, qualifications and production capacity. Insight into these factors can reduce the risk of complications and issues. Once a supplier has been selected, collaboratively establish key performance indicators (KPIs) to set agreed-upon expectations for factors such as quality, delivery and communication, to enhance accountability and evaluate the supplier's strengths and potential areas of concern.

Optimize supplier partnerships. Onboard highly qualified suppliers and hold them accountable to a clearly defined set of requirements and specifications. A collaborative model ensures that expectations and issues are immediately addressed, and any changes are clearly communicated and agreed upon. Strategic supplier engagement built on strong communication and collaboration enables manufacturers to give suppliers greater ownership over shared risks, as well as clear feedback on where they are excelling and where they need to improve. This leads to an increased ability to quickly adapt to and recover from unanticipated disruptions without sacrificing cost or quality.

Automate for increased resiliency. Supply chain resilience can be strengthened by automating quality processes, increasing inventory levels of raw materials, adding manufacturing and storage capacity to improve surge capability, and increasing the number of suppliers of vital materials to prepare for potential supplier disruption. Automated processes can ensure more valuable data and insights, and improve supplier quality by tracking suppliers and materials, building qualitative and quantitative supplier ratings, including suppliers in corrective action processes, and reducing costs related to supplier issues.

Improve visibility. Visibility across your supply chain enables you to track individual components, sub-assemblies and final products as they travel from supplier to manufacturer to consumer. This translates to fewer disruptions due to the receipt of low-quality, defective or unreliable products, lowering costs and reducing the risk of product recalls.

Mitigate risk with supplier audits. A supplier audit, or an inspection of a supplier’s implementation of industry regulation practices, is a key component of an effective risk-mitigation and quality-management strategy. This is challenging, yet crucial, given the rising number of compliance and reporting requirements for manufacturers globally. Product, process and quality systems audits are vital sources of knowledge. In fact, one of the more predictive indicators of supply chain risk is fluctuating supplier defect rates. Supplier audits help determine the root cause of these defect rates and help identify strategies for addressing them at the process, product and sourcing levels.

Improving quality and safety, while reducing the risk of costly recalls, is undoubtedly one of the most critical challenges facing manufacturers today. Mitigating those risks by building a strong, resilient supply chain is the key to greater transparency, quality and, ultimately, manufacturing leadership.

Prashant Darisi is chief product officer with ETQ, part of Hexagon.