Recall Index - Stericycle Expert Solutions · 2017. 6. 30. · Recall Index, Q3 2015 Recalls Hit...
Transcript of Recall Index - Stericycle Expert Solutions · 2017. 6. 30. · Recall Index, Q3 2015 Recalls Hit...
Q3 2015Recall Index
RECALLS HIT HOME:HOUSEHOLD GOODS DRIVE CONSUMER PRODUCT RECALLS
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Recall Index, Q3 2015 Recalls Hit Home: Household Goods Drive Consumer Product RecallsThe Stericycle Quarterly Recall Index analyzes cumulative recall data from the CPSC, FDA, NHTSA, and USDA. Each quarter, the report investigates emerging trends within the recall industry and includes scorecards with key takeaways in each category.
Recalls Hit Home: Household Goods Drive Consumer Product RecallsGiven the ubiquitous nature of items found in nearly every American home, it’s no surprise that household goods account for the vast majority of consumer product recalls in the U.S. since 2010.
Consistently high consumer demand paired with long shelf lives, constant use, and active resale markets all contribute to higher recall rates. At first glance, the calculus seems simple: the bigger the market, the greater the potential for hazardous product defects. But when we delve into specific household product categories, we see causes, trends, and issues as diverse as the products themselves. Clearly, there are more factors driving high recall rates than sheer volume.
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Recall Index, Q3 2015 Recalls Hit Home: Household Goods Drive Consumer Product Recalls
Here, we see that a longer-than-average product life span can be a significant contributing factor. The figures show that numerous products recalled since 2010 were actually manufactured and sold in the 1990s. Age and deterioration can compromise structural integrity and lead to collapse, as well as increase the risk of overheating and fire. Given this connection, it is not surprising that these factors are the leading causes of recalls in this category.
The Consumer Product Safety Commission (CPSC) reports that 15 million appliance units have been recalled since 2010 due to fire hazard concerns. Statistics from the National Fire Incident Reporting System (NFIRS) show that between 2002 and 2009 (the latest figures available), there were more than 69,000 fires in which a household appliance was the primary cause – a figure far higher than the number of fires attributed to
recalled items1. This is a cause for concern because while many of these fires may be attributed to factors such as user error, others may have been caused by a product defect.
“If you compare a first-generation blender that had only an on/off switch with one to-day that has 14 speeds and a data-storage center [microprocessor], there’s a lot more that can go wrong with the newer unit.”
The ever-growing complexity of household appliances is a leading fire safety concern, according to Stuart Lipoff, Vice President of Publications at the Institute of Electrical and Electronics Engineers. “If you compare a first-generation blender that had only an on/off switch with one today
that has 14 speeds and a data storage center, there’s a lot more that can go wrong with the newer unit2.” Clearly, as technological advances continue there will be new haz-ards and safety features for manufacturers to consider.
Clothes dryers, for example, have evolved to the point that early-warning fire safety systems can be built into the design. Even something as simple as a lint buildup indicator could significantly reduce the existing risks. Excess lint was cited in 2,609 of the 13,723 clothes dryer fires reported by NFIRS between 2002 and 20093.
Such enhancements – along with improved product devel-opment and testing – would not only save lives, prevent injuries, and protect personal property, they would help manufacturers limit the costs associated with recalls. The age and resale of many products can complicate and add
to the price of traditional recall notification and retrieval mechanisms. Instances in which a manufacturer can issue a kit to fix the problem are limited in this product category, as many repairs require an on-site service visit.
123www.consumerreports.org
Furnishings, fixtures, appliances, and housewares accounted for 44 percent of all recalled consumer products in the U.S. during Q3 2015, and 46 percent since 2010. More than 130 million units have been recalled over that span, with 24 recalls impacting more than one million units each.
Products Under Fire
UNITS RECALLED SINCE 2010 BY YEARS DISTRIBUTED
FIRES CLEARLY LINKED TO A FAULTY PRODUCT>20K Incidents
8 Deaths
~1K Injuries
2010-2015 ACCORDING TO USFA
15.7K2002-2009
RemedyThe average retail price of these products range between $100 and $300. When you multiply the figures across 130 million recalled products, the case for a focus on safety issues is undeniable.
36.7MM 49.3MM
17.6MM 26.8MM
1950-1999 2000-2005
2006-2010
2011-2015
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Recall Index, Q3 2015 Recalls Hit Home: Household Goods Drive Consumer Product Recalls
In the past, lead was one of the top hazards for toys and other children’s products. There were roughly 20 lead-related toy recalls each year from 2005 to 2010. Since 2013, there have been only five. While manu-facturers have succeeded in minimizing this hazard, in recent years, choking, strangulation, and entrapment have emerged as the leading causes of recalls.
Further complicating matters is the extremely active “hand-me-down” market created by the relatively short period of time in which the consumer finds the prod-uct useful. Given that recalls of children’s products are sometimes initiated more than 10 years after the initial sale, resellers often find it difficult to keep pace with the latest developments. Large franchise retailers maintain sophisticated recall training programs and work closely with the CPSC to ensure recalled products are not resold. Still, some slip through the cracks. Small businesses often lack the resources for such rigid compliance.
In the end, we find a recall environment that can be as costly to the retailer as the manufacturer. While the most
common manufacturer remedies are relatively low cost, the brand, regulatory, and legal liabilities facing retailers can be anything but. The Consumer Product Safety Im-provement Act carries strict penalties for businesses and individuals found to have sold a recalled product4. And where regulatory penalties are levied, the plaintiffs’ bar and consumer advocacy groups are never far behind.
“The Consumer Product Safety Act (CPSIA) of 2008 defines the term ‘children’s product’ and generally requires that children’s products: comply with all applicable children’s product safety rules; be tested for compliance by a CPSC-accepted accredited laboratory, unless subject to an exception; have a written Children’s Product Certificate that provides evidence of the product’s compliance; and have permanent tracking information affixed to the product and its packaging where practicable5.”
4www.davidrickslaw.com5www.cpsc.gov
Children’s products comprised 12 percent of all U.S. consumer product recalls in Q3 2015 and now account for 19 percent of these product recalls since 2010. In the last five years, more than 56 million units have been recalled.
RemedyJust as the cost of toys varies widely, so does the cost of remedies. Items that average $60 or less are typically replaced or reimbursed, while modification kits are often utilized for products over $100. The importance of selecting the ap-propriate remedy, along with factoring in a strong hand-me-down market, makes the execution of a children’s product recall especially complex.
~4.7K Incidents
15 Deaths
~550 Injuries
2010-2015
TOYS VIOLATING REQUIRED STANDARDS
STOPPED BY CPSC & CUSTOMS BEFORE
MAKING IT TO CUSTOMERS
~10MM
2010-2015
TOP HAZARDS
StrangulationChoking Entrapment
The Hand-Me-Down Dilemma
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Recall Index, Q3 2015 Recalls Hit Home: Household Goods Drive Consumer Product Recalls
6www.cpsc.gov7www.cbsnews.com
Fashion Faux Pas
Clothing, jewelry, and accessories accounted for eight percent of all U.S. consumer product recalls in Q3 2015. Since 2010, more than 50 percent of all clothing recalled in the U.S. was designed for children and infants.
During the same time frame, jewelry accounted for 36 percent of all recalled units in this product category. In all, nearly 10 million units have been recalled over that span.
The above statistics demonstrate that while anyone is at risk, children are most vulnerable. The most common drivers of recalls in this category – including entrapment and strangulation, hazardous materials, and flammability – are particularly dangerous to children. Worse yet, the same root causes are creating problems year after year.
A common concern for children’s clothing, involves drawstrings on children’s sweatshirts and pants. These strings can become entangled in playgrounds, cars, and doors, causing a strangulation or dragging hazard for children and toddlers. As a result of 26 reported deaths, directly related to these issues, the CPSC approved a rule in 2011 to classify drawstrings in children’s clothing as dangerous6.
Another leading factor that continues to cause cloth-ing and jewelry recalls are hazardous materials. These banned chemicals such as lead and cadmium known to be carcinogens and neurotoxins continue to be found in children’s jewelry and accessories at alarming rates. These products are often cheaply made, which means they can easily break into pieces small enough to be ingested by a child7.
With the same defects creating new liabilities for clothing, jewelry, and accessory manufacturers, the need for greater design and supply chain diligence is evident.
“As a result of 26 reported deaths, di-rectly related to these issues (stangulation and dragging), the CPSC approved a rule in 2011 to classify drawstrings in children’s clothing as dangerous.”
RemedyThe average retail price for these items may be relatively small, with two-thirds of recalls resulting in a refund of less than $50 on av-erage, and one-third requiring just a simple modification. However, given the ongoing nature of the most prevalent issues and the vulnerability of the younger population most adversely affected, the monetary cost of a recall may only be the beginning.
UNITS RECALLED SINCE 2010
~10MM OF CLOTHING RECALLED SINCE
2010 HAS BEEN FOR CHILDREN / INFANTS
>50%CPSC BANNED ELEMENTS FOR CLOTHING & JEWELRY
Chromium
24
Cr CdCadmium
48
NiNickel
28
PbLead
82
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Recall Index, Q3 2015 Recalls Hit Home: Household Goods Drive Consumer Product Recalls
Home is Where the Hazards AreDespite manufacturers’ best efforts, recalls of household goods are on the rise and likely to continue at this rate.
As such, preparedness is paramount. Manufacturers should have a recall logistics and communications plan in place. It is important to maintain detailed records to enable effec-tive consumer notification and product retrieval processes. Companies should also work closely with regulators and industry experts to ensure timely and compliant execution in the event of a recall.
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Recall Index, Q3 2015 Recalls Hit Home: Household Goods Drive Consumer Product Recalls
The Recall Scorecard, Q3 2015
FDA
OF FDA RECALLS WERE INTERNATIONAL
40%
FDA TOTAL RECALLS
417
18% FROM Q2 2015
MED DEVICE UNITS
RECALLED BY QUARTER
Q1 2015
82.5MM
Q3 2015
70.2MM
Q2 2015
31.2MMPHARMACEUTICAL UNITS RECALLED
BY QUARTER
1.7
Q12015
57.0
Q42014
28.7
Q22015
13.6
Q32015
In Millions
FDA MED DEVICE RECALLS
2633% FROM Q2 2015
COMPANIES WERE INVOLVED IN A FDA FOOD
RECALL
86
TOP PRODUCT CATEGORIES BEHIND Q3 2015 FDA FOOD RECALLS
18%Grains, Cereals & Bakery Products
10%Supplements
11%Vegetables
8%Herbs & Spices
14%Candies
11%Dairy
Products
OF RECALLED FDA FOOD UNITS DUE TO BACTERIA CONTAMINATION
43%
Listeria in ice cream was the most common contaminant
OF MED DEVICE COMPANIES HAD
>1 RECALL IN Q3 2015
28%One company had 23 recalls in Q3 2015
84%
OF PHARMACEUTICAL RECALLS WERE NATIONWIDE IN Q3 2015
FDA PHARMA RECALLS
6714% FROM Q2 2015
FDA FOOD RECALLS
8751% FROM Q2 2015
USDA
USDA FOOD RECALLS
32
27% FROM Q2 2015
TOP CAUSE OF USDA RECALLS
37.5%Misbranding
POUNDS OF FOOD WERE RECALLED
BY THE USDA
7.7MM
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Recall Index, Q3 2015 Recalls Hit Home: Household Goods Drive Consumer Product Recalls
NHTSA
TOTAL UNITSRECALLED
9.4MMNHTSA RECALLS
200Down 83% from Q2 2015
TOP CAUSES FOR Q3 2015 AUTOMOTIVE RECALLS
CPSC RECALLS
96REPORTED
INJURIES IN Q3 2015 AS A RESULT OF CPSC RECALLS
136 ~3x the number of injuries compared to Q2 2015
TOP HAZARDS BEHIND CPSC EVENTS
1% FROM Q2 2015
A Class I recall, according to the FDA, is a situation in which there is a reasonable probability that the product will cause serious adverse health consequences or death. A Class II recall is a situation in which the product could cause temporary or medically reversible adverse health consequences or where the probability of serious adverse health consequences is remote. The FDA defines a Class III recall as a situation in which the product is not likely to cause adverse health consequences.
Stericycle ExpertSOLUTIONS & the Recall Index ExplainedStericycle ExpertSOLUTIONS helps partners minimize risk to the public and to their company brand by executing and planning for product recalls efficiently, effectively, and compliantly. Each quarter, we analyze cumulative recall data across six product categories. This helps our partners navigate the regulatory environment and identify trends.
How the Stericycle Recall Index is Compiled
FDA Data CPSC Data USDA Data NHTSA Data Terminology
The Stericycle Recall Index gathers and tracks cumulative data from the four primary federal agencies that oversee recalls in the United States: the Con-sumer Product Safety Commission (CPSC), the Food and Drug Adminis-tration (FDA), the Food Safety and Inspection Service (FSIS) of the United States Department of Agriculture (USDA), and the National Highway Traffic Safety Administration (NHTSA).
To track trends in food, pharmaceu-tical, and medical device recalls, the Stericycle Recall Index uses information publicly available in news releases posted on the FDA website. For ad-ditional insight into recalls governed by the FDA, Stericycle collects and analyzes data from the agency’s week-ly enforcement reports, which provide additional details including recall class, quantity of units affected, and number of reported incidents.
For further insight into consumer product recall trends, Stericycle analyzes data from CPSC recall announcements. When compiling statistics and analyz-ing trends for consumer product recalls, the Stericycle Recall Index uses standard product categories and hazards rec-ognized by the CPSC.
For additional insight into food recall trends involving meat, poultry, and egg products, the Stericycle Recall Index collects and analyzes data from recall announcements posted on the USDA’s FSIS website. Statistics and trends are compiled using standard product categories, classifications, and reasons for recalls as recognized by the USDA.
To understand trends in the automo-tive industry, the Stericycle Recall Index analyzes data from NHTSA reports on recalls of autos, child seats, equipment, and tires.
Announced recalls represent those recalls documented in news releases published on agency websites. Enforced recalls refer to those recalls document-ed in weekly FDA enforcement reports that are summarized based on the FDA assigned Event ID. Their docu-mentation can lag behind announced recalls by weeks or even months be-cause the recall process may take time to complete.
13%Machine Failure
13%Overheating
13%Laceration
7%Entrapment / Strangulation
7%Choking / Small Parts
9%Structural Collapse
CPSC
33% FROM Q2 2015
8%Air
Bags
10%Suspension
14%Equipment
15%Electrical System
Recall Index, Q3 2015 The Recall Scorecard