Trusting the Quality of Products We Use

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Trusting the Quality of Products We Use

• Should we be concerned?

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Agenda

• Background
• Research Method
• Canadian Product Recall Structure
• Product Recall Findings
• Cost of Product Recalls
• Concerns

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Background

• Increase in high profile product recalls
• No statistics publicly available
• Objectives (2007)
• Are product recalls increasing in Canada?
• If they are, which manufacturing sectors are
  contributing the most to the problem?
• What is the costs to business and consumers of
  product recalls?
• What are the underlying causes of the product
  recalls?
• What can be done to reduce the number of product
  recalls?
• Partnered with National Quality Institute

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Research Method

• Accessed public websites of government
  departments and agencies responsible for product
  recalls
• Cross referenced U.S. Consumer Product Safety
  Commission, CBC, Consumer Reports
• Factors reported
• Number of recalls, quantity, geographic scope,
  product category, product age, cause,
  seriousness, country of origin
• Coded each product recall record
• 2002 2007

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Canadian Product Recall Structure

• Health Canada
• Juvenile products, clothing, drugs, herbs,
  medical devices
• Canada Food Inspection Agency
• Canada Standards Association
• Transport Canada
• October 2007
• Introduction of www.SafeCanada.ca

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Product Recall Findings2002 - 2007

• Number of Recalls
• 1037 total over six years
• Recalls almost doubled in 2006 compared with 2005
  for a total of 288
• Recalls in 2007 decreased to 198.

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Canadian Product RecallsUpdated 2008
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Volume of Products Recalled

• Missing data issue
• Estimated that in six years, over 20 million
  products were recalled (based on average per
  recall x number of recalls in each year)

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Types of Products Recalled

• Product Categories
• Food
• Beverages
• Toys
• Jewellery
• Clothing
• Consumer Electronics
• Appliances
• Furniture
• Tools
• Sports Equipment
• Not included drugs/herbs, medical devices,
  automobiles

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Type of Products Recalled

• The top four product categories recalled in 2007
  were food, toys, furniture and appliances
• Food recalls experienced a significant decrease,
  but toys, furniture and appliances grew in terms
  of product recalls
• Other products recalled include jewellery,
  clothing, beverages, consumer electronics, tools
  and sports equipment

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The Age of the Recalled Product

• Speaks to speed of recall system
• Immediate versus long-term problems
• Over the six years 80 of products recalled are
  less than six months
• Conclusion older products are not a major
  concern

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2007 Product Recall Seriousness

• The number of high risk recalls continued to
  decrease from 35 in 2006 to 30 in 2007

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Reasons for Recalled Products

• Problems with food and toys continue to remain
  issues in 2007
• Dangerous ingredients, either lead or bacteria
  caused more problems in 2007

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Example of an Allergy Alert

• Source Canada Food Inspection Agency
• Allergy Alert Ottawa, February 2003
• Undeclared Shrimp, Cuttlefish, Sesame Seeds and
  Soy Protein in Kasugai Roasted Mix Nuts
• Importer Canada Enterprise Co., Burnaby B.C.
• Labels of imported food is an issue

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2007 Country of Origin of Products Recalled

• The number of product recalls from products made
  in Canada increased from 12 in 2006 to 47 in 2007
• Almost 40 of Canadian product recalls are
  products from China
• Missing data an issue
• Country of origin of ingredients and components
  are not addressed

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2007 New Issue for Product Recalls

• In 2007, it was the first recorded product recall
  by Canadian Standards Association (CSA) for a
  counterfeit component part.
• There has been a growing trend of counterfeit CSA
  authorized marks since 2004.

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Real Cost of Product Recalls
Meat recall could cost millions more Maple
Leaf Aug. 08
Sony battery recall costs 429 million Oct. 06

• U.S. Consumer Product Safety Commission estimates
  annual damages at 700 billion
• No Canadian estimates
• Costs include
• Company financial losses
• Replacement, repair, destroying defective
  products, legal costs (law suits), market value
• Brand equity
• Customer costs
• Reverse logistics (suppliers, retailers)
• Government costs (taxpayer)
• Legislation, monitoring
• Consumer costs
• Information search, replacing or destroying
  products, time

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Concerns and RemediesThe Concerns are Real

• Concerns
• Product recalls are too high
• Product recall system is working to catch
  problems earlier
• Missing information for public
• Lack of integrated product safety policies and
  legislation
• Disconnect between manufacturers and suppliers
• Remedies
• Leadership is needed in government and industry
• Manufacturers and suppliers need to revisit their
  processes and communication
• Need for a centralized monitoring and reporting
  system
• Need for annual reports