The ability to track products through all stages of the supply chain has always been important, but in the event of a recall having an efficient system in place is paramount. Katherine Crichton reports.
WHEN in August this year it was announced toy manufacturing giant Mattel had recalled more than 22 million toys due to safety concerns over lead levels and loose magnets, parents all around the world were wrangling Batman and Barbie toys out of their children’s hands.
A similar situation in 2003 left medicine cabinets empty when Pan Pharmaceutical products were withdrawn from retailers’ shelves resulting in one of the largest recalls of medicines in Australia.
In Europe and North America, there are mandates in place that require manufacturers to be able to trace ingredients or components of products right back to the original source within a specific, and often short, time frame.
In Australia, there are no such mandates under the Trade Practices Act 1974, though there are procedures in place in the event of recalls, which are monitored by the Australian Competition and Consumer Commission (ACCC).
Lin Enright from the ACCC said it is important for public safety that manufacturers know if a standard applies to their products and to know to whom they have supplied particular goods.
“In the first instance, it is the responsibility of the importer/manufacturer/retailer to ensure that if a standard applies, it is met,” she told Manufacturers’ Monthly.
“It is to the commercial advantage of manufacturers to know whom they sell products and if it is covered by a standard, then it is also recommended.”
The impacts of recalls are felt far and wide, not only affecting the consumer but also damaging manufacturers, resulting in tarnished reputations and financial loses associated with disposal and replacement of contaminated products, as well as ensuing litigation.
Advances in track and trace technologies such as RFID is giving company’s more visibility in the supply chain, and if used to their full potential, can offer many benefits, particularly in the event of a recall.
Andy Hecke, national sales and marketing manager with insignia, said that any company manufacturing products entering the consumer market would benefit from the ability to have a recall requirement in place.
“Generally products that go into marketplace require traceability throughout the supply chain — this is driven by retailers and industry bodies,” Hecke explained.
“If manufacturers can provide information as to what, when and where a product is within a required time frame this also demonstrates how a company can respond to a situation, and can also protect them from litigation if they show they did everything reasonably possible to ensure the safety of their products,” Hecke told Manufacturers’ Monthly.
While the notion of using RFID in manufacturing processes is gaining popularity in Australia, the additional cost of moving to a new data capture infrastructure often prevents its introduction in the factory.
Hecke says one of the biggest challenges for manufacturers is balancing cost, verse operational outcome.
“Every company needs to look at their product and their level of responsibility with customers and ask themselves what is the acceptable amount of risk they are prepared to take?
“If you are a manufacturer who produces cardboard boxes compared to a company that manufactures pharmaceutical products then there is obviously a difference in potential consequences,” Hecke said.
“If manufacturers need to demonstrate for legal requirements they can trace products back to their origins then there is a strong business case for RFID technology, but if they don’t need the level of detail it can provide, they are just generating data for the sake of it,” he said.
Keeping track
The key to an effective traceability system is good communication and management between the successive ‘links’ along the supply chain, and the software and how it is used plays an important role in achieving this.
According to Phillip Biggs from Matthews Intelligent Identification, for full traceability, entire software integration is required as it enables manufacturers to link in with equipment on the shop floor.
“Manufacturers can be completely networked into the production line to know when products leave the factory, what components were used in the manufacture and where they came from,” Biggs explained.
“These are the kind of issues companies like Mattel and Pan Pharmaceuticals really struggled with when it came to their traceability systems, the net had to been thrown really wide to make sure they caught everything.
“By being able to have an accurate understanding of the details of what component raw materials go into the final product can really help to reduce the costs of a recall,” Biggs told Manufacturers’ Monthly.
According to Hecke and Biggs, even with a very high accuracy rate of data collection, often the point of weakness in a traceability system is how the information is managed and maintained.
“These systems are collecting transactional data and companies need to know how to query it to get the information they want and this is what most people grapple with,” Hecke said.
Both men suggest with implementing new traceability systems or maximising the use of established ones, a multi-disciplinary approach is required, from IT personnel to procurement officers.
“Everyone from the consumers to workers on the factory floor needs to know about RFID for example and what it can do for them so they can fully exploit the technology,” Biggs explained.
According to Biggs, an efficient traceability system could also give Australian manufacturers a strong advantage over lower cost producers from overseas.
“If manufacturers as an industry, or individual company, decided that one of their key differentiators from their competitors was to have a really good network of traceability systems in place, this would not only help to guarantee the quality of products but would minimise risk for and make them more attractive to retailers, especially in relation to an event like a recall,” he said.
“They can wait until there is compliance to have these systems in place or they can be proactive and go out and get full traceability in place and get a competitive edge.”
For more information email:
ACCC – Lin Enright lin.enright@accc.gov.au
Insignia – Andy Hecke AHecke@insignia.com.au
Matthews Intelligent Identification – Phillip Biggs pkbiggs@matthews.com.au.