According to a study conducted by the Food Marketing Institute, Arlington, Va., and Grocery Manufacturers Association, Washington, D.C., one recall can cost a company $10 million, not including lost sales profits and a tarnished brand reputation.
However, connecting a warehouse execution system (WES) to external systems both upstream and downstream in the supply chain allows companies to respond to such problems within the manufacturing process more quickly, often preventing contaminated or malfunctioning products from ever leaving the facility.
Determining the cause
By providing a high degree of product traceability, an integrated WES can help manufacturers discover and act upon issues that have caused the malfunction or contamination sooner. Earlier detection often allows manufacturers to better understand what product is to be recalled, thus possibly reducing the scope of the recall effort and targeting the affected inventory.
Identifying affected products
By utilizing a WES that is tightly integrated with other supply chain systems, manufacturers are able to more quickly and easily identify products that are part of a recall. Further, companies can utilize the information from the WES to provide customers with the information needed to identify and return the recalled product efficiently.
A well-managed recall process is a must to process recalled product accurately and efficiently. There are many different recall scenarios that a manufacturer must be prepared to handle. Should the products be discarded? Is special handling required? Do the products need to be quarantined for further inspection? Are there specific reporting requirements that need to be completed? Many of these processes can be automated within a WES to guide individuals through the process, thus ensuring a complete, well-organized, well-documented, efficient handling of the affected product.
A WES that is integrated with manufacturing processes can also be used to recognize issues and provide automatic alerts to the warehouse when products are contaminated to keep the product in-house, thus eliminating the recall process. This allows the manufacturer to more easily identify and locate affected products before they leave the warehouse, which also saves time and money.
Contaminated or malfunctioning products are potentially hazardous to the end customer, but could also be extremely detrimental to a company’s financial health. By implementing a tightly integrated WES into the supply chain process, manufacturers are able to quickly identify, track and efficiently recall contaminated or malfunctioning products when necessary – saving time, money and often their reputation.