Could your company be the next to lose $20 million in a recall?
April 2, 2015
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A new study shows that recalls are more common than many people think. And costlier too -- expenses often exceed $10 million per recall, with many companies losing twice that much.
The report, conducted by AMR Research, says that a majority of food and beverage companies surveyed participated in at least one product recall in 2007 with more than half of the losses associated with those recalls exceeding $10 million. In fact, the study, which was developed in conjunction with Lawson Software, found that 40 percent of respondents had incurred losses of at least $20 million in 2007. This is despite the fact that traceability processes and systems can make many of these recalls avoidable.
The AMR Research study, “Traceability in the Food and Beverage Supply Chain,” conducted by Research Directors Lora Cecere and Lucie Draper, and Senior Research Analyst Simon Jacobson, surveyed companies in the United States, the United Kingdom, France and Sweden.
The study reveals that, on average, it takes food and beverage companies 14 days to sense the need for a recall and 34 days to enact it. By that time, less than 40 percent of the affected product can be collected because the rest either has already been consumed or thrown out, respondents said.