15 September 2008
Buyers are expected to have skills in managing the quality of goods as they pass through the supply chain, according to an industry expert.
Raees Lakhani, client services director at consultancy Resources Global Professionals, said procurement is required to be aware of potential health and safety risks and blue-chip companies are increasing training for purchasers on the issue.
"There has been a move towards procurement professionals becoming more involved in health and safety matters. By making procurement more aware of these issues, businesses can reduce the catastrophe of product recalls."
His comments come after a study revealed more than a quarter of food and beverage companies lost an average of $50 million (£28 million) each after having to recall products last year.
Diana Spellman, managing director of consultancy Partners in Purchasing, agreed buyers are being trained on health and safety, but argued education is meaningless without regular examination of purchasing processes. "All orders have to be visible and traceable. Better auditing is often required otherwise training is irrelevant."
The survey of 251 supply chain managers in the US and Europe, by AMR Research and Lawson Software, found all the firms recalled at least one product, with 26 per cent suffering losses of up to $50 million. A further 14 per cent lost as much as $100 million (£56 million).
Problems relating to health and safety resulted in the most recalls - there were 128 incidents of this nature in 2007. This was followed by poor product performance, with 119 cases, and potential contaminated goods, which resulted in 111 recalls.