Cost of Poor Quality from Recall Failures
Definition
Poor traceability in product recall management results in identifying and isolating defective units inefficiently, leading to unnecessary recalls of entire batches, increased rework, inventory quarantine costs, and accounting adjustments like credit notes.
Key Findings
- Financial Impact: AUD 100,000 - 1M per major recall event (over-recall waste, returns processing); 2-5% inventory value loss from quarantined stock
- Frequency: Per recall incident, rising with defect rates
- Root Cause: Lack of integrated ERP traceability systems causing manual delays in backward/forward tracing
Why This Matters
The Pitch: Household appliance manufacturers in Australia 🇦🇺 waste AUD 500,000+ annually on inefficient recalls. Automation of traceability eliminates over-recall waste and speeds compliance.
Affected Stakeholders
Quality Managers, Supply Chain Directors, Compliance Officers
Deep Analysis (Premium)
Financial Impact
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Current Workarounds
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Methodology & Sources
Data collected via OSINT from regulatory filings, industry audits, and verified case studies.
Related Business Risks
ACCC Penalties for Inadequate Recall Traceability
Capacity Loss from Recall Disruptions
Non-Compliance with AS/NZS 60335 Safety Standards
Rework Costs from Delayed Safety Compliance Scheduling
Idle Lines from Compliance-Driven Rescheduling
Material Cost Volatility and Bill of Materials Inaccuracy
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