Product recalls are something no company wants to face, but they may be inevitable. Even if safety precautions and policies are maintained to the utmost extent, it's almost certain your business will have to deal with a recall at some point in time, and strict warehouse management techniques are necessary in order to minimize potential damage.
Recalls are especially important to be aware of and prepared for in the automotive industry. New ways of making products, equipment malfunction and consumer concerns are all reasons a recall of automotive parts may occur. In 2014, the National Highway Traffic Safety Administration reported a record 803 automotive recalls due to NHTSA investigations, affecting a total of nearly 64 million vehicles.
What can automakers do to minimize the effect of product recalls and make sure their customers are safe on the road? Detection, readiness and prevention are key when it comes to staying compliant with NHTSA regulations and investigations. According to Forbes, it may not be a bad thing to recall parts on a regular basis.
"The recall rate could be an indication of a manufacturer's risk tolerance or strategy," Phong Ly, CEO of auto statistics aggregator iSeeCars.com, told Forbes. "Some automakers may issue recalls at a higher frequency because they may be more cautious and proactive."
Have a Plan
In the event of a recall, companies need to have a plan in place in order to minimize business loss and reduce error. Make sure employees and business partners know what to do in this event, including affiliated dealerships that will have to perform maintenance on affected cars. Communication is key.
"Trying to figure out everyone's roles and what steps to take during a massive recall with gathering media attention is very difficult to do on the fly," Dave Wix, founder and managing partner of the Wix Law Group, told Inc.
In other words, instead of waiting until it's too late, companies should ensure recall readiness by learning about safety regulations in the industry, having a product recall manual and conducting practice recalls once per year.
It's also important to make sure companies know where their parts are manufactured. For instance, airbag maker Takata has been faced with some serious recalls in the last year. According to Consumer Reports, five people died due to shrapnel from exploding airbags made by Takata. In May the number of recalled vehicles reached a staggering 33.8 million, from 10 different automotive companies. The automakers affected would need an effective plan in order to be able to quickly and easily deal with affected parts and vehicles and keep consumers safe.
Trace the Product
Cars on the road aren't the only ones affected by parts recalls. In order to fully accommodate for all manufactured vehicles, auto companies shouldn't neglect the vehicles in the factory line for newer vehicles that are still being made or cars that have not yet been sold. Automakers should be able to easily locate the recalled products in their manufacturing lines and warehouses. Mobile data collection can help companies find these affected products in their warehouses and make sure they aren't used in the manufacturing process. When connected with enterprise resource planning software, data collection technologies like barcode scanners and sensors help make inventory management easier and faster.
Make Sure Equipment is Up to Date
Sensors are also important tools that can help manufacturers stay on top of routine maintenance. Recalls are sometimes the result of a faulty piece of equipment on the factory floor - radio frequency identification devices connected to a company's ERP solution can alert managers to possible issues that may arise on a day-to-day basis.