Why Recalls Depend on the Supply Chain

Peanut butter isn't ConAgra's only recall trouble, either. The company has had to call back hundreds of kilograms of ground beef in the past few years, and in October ConAgra's Banquet pot pies were recalled when at least 211 people in the US got salmonella poisoning, which the Centres for Disease Control and Prevention links to the pot pies.

But it's not just ConAgra. Recalls are blooming like flowers in spring: Dole's e.coli bagged salads; Metz Fresh's salmonella spinach; REI's faulty children's bikes; Mattel's lead-painted and choking-hazard toys, just to name a few. Globalization accounts for some of the surge. Many companies depend on overseas production, where quality controls are difficult to monitor. And it's not just hard goods like toys from China. Food, too, arrives by container ship from other countries, and sometimes it's contaminated.

But mainly, things go wrong. That's business. That's life.

"One risk every company faces is a recall," says Jane Barrett, an analyst at AMR Research in Boston. So if recalls are inevitable, a CIO must help create a supply chain ready to cope with them, she says, by quickly providing the relevant data to facilitate the process. And a recall conducted under pressure from federal regulators, an angry public and plaintiff's lawyers tests every supply chain management decision a CIO makes.

Best practice calls for companies to be able to track and trace the pedigree and whereabouts of the raw materials used to make their products all the way through the manufacturing process and out to end-point customers, says Steve David, former CIO of Procter & Gamble. But many companies, for many reasons, don't have supply chains that can do that, and that becomes evident in clumsy recalls that go on too long, cost too much, and have the potential to damage corporate and product reputations.

"The ugliness of bad data management really hits you when you have a product recall," David says.

As soon as the decision is made to recall a product, companies should release consistent, correct information to minimize brand damage, says Joe Barkai, a practice director at Manufacturing Insights. "But," he says, "now [traceability] is mainly a manual procedure. Companies don't have it automated."

And that's a problem. ConAgra, for example, had to revise its recall twice as it learned more about how much infected product it could have manufactured and where it might have gone, according to FDA records. The original Valentine's Day 2007 announcement recalled peanut butter made after May 2006. In early March, ConAgra expanded the scope to December 2005 and added toppings made in its Humboldt, Tennessee, plant using peanut butter from its Sylvester, Georgia, plant, where the original contamination had occurred. A week later, ConAgra pushed the date back to October 2004 - 22 months before the first reported illness.

ConAgra declined to comment on the recall. Talking about how its IT and supply chain managers perform recalls, a spokeswoman says, "doesn't align with our priorities". But it's clear the experience revealed problems at ConAgra. Paul Hall, vice president of global food safety, gave a talk at the Food Marketing Institute in April, after the recall was under way. The peanut butter recall taught ConAgra lessons other food manufacturers can use, he noted, including knowing where all of your product is going, such as toppings, and assessing ahead of time overall recall and traceability processes across your supply chain.

Hall himself is at ConAgra as a result of the recall. The company created a global food safety group after the recall and hired him to lead it.