RedPrairie's 2008 Survey On Recall Legislation

In the wake of the multitude of recent product recalls, several pieces of legislation have been proposed to better regulate recalls. Earlier this year, the Senate and House passed legislation to beef up the Consumer Product Safety Commission, toughen penalties for violating safety laws, ban lead in children's products, and require the government to maintain an online database of product hazard complaints. However, proposed legislation is not just focused on retailers. Consumer packaged goods (CPG), food and beverage (F&B), and grocers also face a series of potential regulations intended to prevent and better manage recalls.

In a survey that went out to a variety of companies that could potentially be impacted by this legislation (retailers, grocers, CPG companies, F&B manufacturers, and third-party logistics firms), RedPrairie sought to gain insights into the industry's perceptions on the impact of recall legislation. The survey also probed the potential impact of industry self-regulation without legislation. We picked a series of titles and roles that would have a perspective on recalls – logistics/supply chain, store operations, IT, and general management.

Certainly, there are lots of ways to approach recall management – legislation, improved industry standards, better testing capabilities, and technology – and this survey shows a lack of consensus on a "silver bullet" to fix the issue. However, RedPrairie does sense that all industries are committed to doing a better job preventing, managing, and communicating recalls – and that it will likely take a combination of efforts to improve the situation.

Surprisingly, 56% of respondents were not aware of the proposed legislation from the US Congress. While we did not probe to determine why they were not aware, we can speculate on a couple of reasons: 1) the various legislation proposals impact industries differently and at different times. For instance, we found third-party logistics companies were less aware of the legislation than other groups and; 2) companies don't tend to act on legislation until they know the requirements and deadlines for compliance. There is a high likelihood that someone in the companies surveyed is monitoring the legislation, but it has not yet drifted to the IT, Supply Chain, or Store Operations groups.