The number of recalls in the automotive industry has increased considerably over the last few years. According to information from the National Highway Traffic Administration (NHTA), the US market experienced 900 vehicle recalls in 2014, the highest figure in the last ten years. In the same year, 1.9 million cars in Germany were affected by 127 recall actions, according to figures from the Centre of Automotive Management.
It’s undoubtedly an industry with a highly integrated supply chain and hence when a recall is announced, it effects not just one single OEM but also suppliers and their subcontractors. That’s why, we see a surge in the demand of product recall insurances today.
Recalling a product is a nightmare for manufacturers due to the legal hassles involved as well as the financial impact it has on the profitability. The wide reach of internet and social media, causes potentially irreparable damages to the manufacturers’ brand image, which could eventually lead to customer loss.
In this blog series, we will see the possible reasons behind such recalls & how technology can help in minimizing these recalls.
There could be multiple reasons behind these recalls. Some can be traced to the product development stage like design defects and non-compliance with related regulatory requirements; some could be traced to the manufacturing stage through faulty components and parts, manufacturing equipment not performing to specifications, operator error, and compromises on manufacturing quality standards.
Lack of a mechanism for addressing field failures is another cause behind faulty products. The steady increase in the use of platform strategy by manufacturers also increases the risk manifolds in terms of a field failure and product recalls as one platform will be linked to different models.
It becomes important for manufacturers to identify the real underlying root causes and to follow a diagnostic approach so that future occurrences can be minimized.
So how is technology helping the manufacturers?
In a world, where every piece of information can be digitized and transmitted, capturing the right information at the right time and deriving meaningful inference is crucial. There are technology solutions in place that enable manufacturers to store and analyze real time production data right from raw material to final shipping stage. One such technology is the ‘track and trace’ solution.
Tracking refers to the function of digitally storing all critical manufacturing data and associating this data to the batch identifier or serial number of the part that was created, while Tracing refers to the reverse path: given a finished serialized product, being able to retrieve all such data related to all work stages.
This information is most efficiently and more completely gathered through automated transactions from shop floor workers and machines to tie lot numbers, serial numbers and process and quality data to the finished good. Not only is it gathered more effectively and efficiently, it is retrieved within seconds as compared to the hours or days it might take to track down associated products that may need to be recalled.
What are the benefits from the track and trace solution?
- Providing the customer base (and media) with a rapid response to the situation
- Significantly minimizing the amount of recalls necessary because of the ability to track the defective lot to each of the finished parts that had components from that lot rather than having to recall a shift’s worth or day’s worth of product.
- Proactive identification of non-compliance and risks on safety
- Reduced response time to failures
- Optimized inventory and reduced inventory costs
- Reduced wastage on products
- Access to critical product data for effectively handling recalls
- Reduced costs on warranty
In our next blog, we will discuss how a manufacturer implemented track and trace solution to reduce costs of compliance and minimized recalls.