Product Recalls on the Rise
In the last 5 years, product recalls have steadily risen. In the past, product recalls were fairly straightforward, and would often go undetected by the public.
However, things have changed, and today’s recalls are much more complex and pose a considerable risk to a company’s image, reputation and profits. In fact, the average cost of a recall in the food industry is around $10 million, according to a study by the Food Marketing Institute and the Grocery Manufacturers Association (GMA). And in some cases, the ripple effects of a recall can cost billions.
Reputational Damage of a Recall
To make matters worse, the reputational damages of a recall can be so significant that customers will not buy the product again. Research by Harris Interactive found that 15% of customers would not buy a product again if it had been recalled. The study also found that 21% of customers would not buy any product from the manufacturer following a recall.
An Expensive Exercise
In the process industries, a product recall typically involves a company removing a product from the market due to the possibility that the product may be contaminated, mislabelled or there’s something wrong with it. Generally, the biggest single cost associated with recall incidents is the loss of sales and business interruption, due to the disruption to operations and reputational damage. Some other costs associated with recalls include:
- Identifying and tracing the contaminated products
- Disposal and replacement
- Third party consultant costs
- Cleaning contaminated plants
- Costs associated with restoring the brand
Increasing Complexity of Supply Chains
But, why exactly have product recall incidents been gaining momentum?
There are many factors that are contributing to the rise. For instance, the number of large multi-national, multi-site corporations that have complex global supply chains has increased in recent years. This has made it difficult to manage risk with some countries having weaker quality controls.
At the same time, the number of safety regulations and harsher penalties has also increased. Customer awareness has also heightened due to technology.
Economic Pressures Playing a Part
Other contributing factors include the economic pressures associated with the process industries, sometimes resulting in shortcuts or increased risk of human error.
At the same time, food fraud, including adulteration and counterfeiting is a growing problem worldwide that has resulted in many recalls, reputational damage and significant costs. We discussed how food fraud is threatening the food industry in a previous blog article (for a more in-depth look at food fraud please take a look).
So, what can manufacturers do to stop recalls from occurring, and if they do occur how can manufacturers lessen the impact?
Pigging Minimises Mixing and Dilution
One of the most effective ways to reduce the risk of product recalls where liquid processing is involved, is by implementing a product recovery (‘pigging‘) system. That’s because pigging will minimise the chances of contamination and cross-contamination occurring in the first place.
The technology recovers up to 99.5% of product from the line during changeovers. This minimises the chances of product from the next batch mixing with and diluting the new product as the pig has already removed the previous product. Pigging is particularly effective in hygienic applications such as food and beverage processing.
Paint and coatings are another key industry that processes their products hygienically, due to the need to minimise their contamination and cross-contamination risks and comply with stringent regulations on biocides. In particular, regulations have meant manufacturers are placing increasing emphasis on plant hygiene and robust processes and procedures. Therefore, many manufacturers are adopting technology such as hygienic and sanitary pipeline product recovery.
Recalls Increasing the Importance of Traceability
Not all contamination and cross-contamination incidents can be prevented. That’s why it’s important for companies to have traceability in their supply chains.
Therefore, if a contamination or mislabelling incident does occur, having batch traceability enables organisations to trace the source of the problem through their supply chain, swiftly recall the product thereby minimising disruption to operations.
Responding to recalls efficiently and quickly minimises the risk to human health, which in turn reduces the risk of consumers perceiving a company or brand in a negative way.
Improving Batch Traceability by Pigging
Traditionally batch or lot traceability in liquid manufacture is problematic. However, pigging systems can help process companies by greatly improving the reliability and efficiency of liquid product lot or batch traceability.
From food and beverage to cosmetics and personal care, many companies use pigging not only to recover product but to create precise, reliable liquid, wet product or ingredient separation in their production process. This improves their operational efficiency and also enhances traceability.
At the same time, pigging can create the same reliable, tangible separation between batches, meaning traceability can be sustained throughout the whole production process.
Here you can find out more about how pigging improves lot traceability during liquid and wet product processing.
Find Out More
So, if you process food, beverages, confectionery, personal care, cosmetics, pet food, paint and coatings and are currently not ‘pigging’, then get started today!
Alongside reducing contamination risks and improving batch traceability, pigging also offers many additional benefits including reducing waste, increasing yields, speeding up changeovers and improving environmental sustainability.
Importantly, payback from Pigging Systems is typically less than 12 months, delivering a high ROI (here’s more on product recovery system payback).