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3 Lessons from the Biggest Supply Chain Planning Mishaps Of 2016

Michael Wilson | Dec 20, 2016

2016 has been an eventful year for the supply chain industry. Several product recalls have made the news, and though many stories tend to be more hype than detail, it's always ...

2016 has been an eventful year for the supply chain industry. Several product recalls have made the news, and though many stories tend to be more hype than detail, it's always worth reflecting on — and learning from — others' mistakes before gearing up for next year's supply chain planning. Here we'll take a look at three major companies who’ve experienced some of the most significant blunders of 2016, and how each has taken action to fix their issues for the public.

1. Samsung Galaxy Note 7 Batteries 

This dangerous mistake was one of the most heavily advertised of 2016. Consumers reported their new Samsung Galaxy Note 7 phones exploding in their hands, from the batteries shorting and catching fire, resulting in toxic chemical leakage and sustained injuries. Making matters worse, even after the initial successful recall, the second wave of phones experienced the same problems. Consequently, another recall had to be issued only days later. The alleged problem was associated with the battery and how it was assembled in production. To remedy this, Samsung switched its battery supplier for the second round of Note releases.

These incidents have destroyed more than the actual product itself; the whole line has been discontinued and deemed illegal for sale. Perhaps Samsung tried to rectify their previous errors too quickly. Although investigations were performed on each wave of tech releases, changing suppliers was a hasty decision, given the timeline of the new releases. Samsung also chose to trust its competitors, which is not an ethical issue, but the compatibility of their tech might not have been the key component to the overall solution. 

2. McDonald’s Toy Recall

A good idea in theory, McDonald’s issued a recall for a whopping 29 million in "Step It!" fitness tracker toys after complaints that children were sustaining blisters and burns. Thorough test runs with children's products could have prevented this from happening, and like Samsung, the factors that were associated with production proved to be detrimental to the finished product. The company offered to exchange the tainted product with apple slices or a different toy to make up for the trauma.

3. SunOpta Sunflower Kernels

In May, SunOpta voluntarily recalled some of its sunflower kernels due to possible listeria contamination at its plant in Crookston, Minnesota. SunOpta reported more than a $16 million loss, and the recall spread beyond SunOpta products to companies supplied by SunOpta. The listeria concerns forced these companies, ranging from Quaker Oats and other national brands to regional snack companies like Honey Bunches, to recall their products containing SunOpta’s sunflower kernels.

There were no confirmed illnesses related to the consumption of the sunflower kernels, and SunOpta offered cash refunds for returned products. The company resumed operations in its Crookston plant after adopting enhanced testing procedures. 

The SunOpta recall provides an illuminating example of the knock-down effect throughout the supply chain — from manufacturers and distributors through to end users — that may occur when a product is recalled.

Lessons Learned 

All three companies had very different issues with the same underlying message for each entity in the supply chain and marketplace: the time, energy and means for successful procurement are completely dependent on the vigilance to uphold the highest standard during production. If Samsung, SunOpta, and McDonald’s  had taken the time to evaluate the risks of the primary model and ensured that their products were safe to release, they could have avoided hard hits to their own businesses and to their customers. Every aspect of a strong company is maintained through optimal supply chain planning and streamlining, and the lessons learned from these three businesses can be applied in 2017 for a successful year overall.

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