Transparency and communication key to product recalls

23 June 2014 | Farzad Henareh

Farzad Henareh, managing director of Europe at Stericycle Expert Solutions

Two luxury car manufacturers, Porsche and Jaguar Land Rover, have recently announced they are recalling vehicles in the UK. The recalls may be small in number, but they are part of a growing theme in the automotive industry.

Car manufacturers value the safety of their customers and demonstrate appreciation for their concerns. The brands that openly communicate issues that need to be rectified and demonstrate effectiveness in resolving the problem, often find that the loyalty of their customers can actually increase.

The Aston Martin recall from February this year illustrated that increasingly global and complex supply chains can be a challenge in ensuring product quality. Aston Martin issued the recall as it came to light that a Chinese sub-supplier allegedly used counterfeit plastic material in part of the accelerator pedal.

No accidents have been reported as a result of the fault, but the importance of brand value was enough for Aston Martin to warn customers of the potential issue and provide replacement pedals to all those affected. By offering to fit the part at a local dealership, Aston Martin has created another touch point with its customers, giving it the chance to talk to customers face-to-face and deepen the relationship. This way, a face is put to the brand, humanising it and making it easier to connect with the customer.

This proactive demonstration of transparency and open communication highlights the benefits of a voluntary recall, rather than an enforced one. In the past, companies have talked at length about customer safety, but have come up short when an enforced recall is imposed. However, in an age where customer loyalty is continually decreasing, voluntary recalls are simply not associated with danger, risk or embarrassment in the way that enforced recalls are. They are now closely associated with customer satisfaction and brand loyalty. Companies can actually help guide the customer through the recall lifecycle and provide a positive touch point that minimises the disruption caused to the consumer.

While a voluntary recall can be a positive experience, more effort needs to be made to reduce the number of recalls in the first place. Globalisation has allowed supply chains to become longer, with a greater geographical spread, which means there is more scope for complication. A longer supply chain is more difficult to manage and communication can often break down. Consequently, quality assurance can be neglected, allowing a batch of less-than-perfect products to slip through the net.

Furthermore, the counterfeit manufacturing sector is growing. While China is the leading car manufacturer, it is also the leading producer of counterfeit goods. Expansion of the supply chain into overseas markets has increased the number of counterfeits available. This being the case, supply chain management is of the highest importance in order to avoid further recalls. Perhaps the phrase “quality over quantity” needs to be applied more stringently to supply chain and logistics.

☛ Farzad Henareh is managing director of Europe at Stericycle Expert Solutions.

Supply Business will examine the role of a CPO in a product recall in its July edition.

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