Executives at companies in many industries are thinking about managing a product safety or quality crisis. Indeed, 42 percent of the respondents to a recent Deloitte poll said they expect government agency scrutiny of product safety to increase through 2017. Interestingly, only 15 of the respondents said their company is fully prepared to manage a product safety or quality crisis.

 

Almost 20 percent of the respondents reported that their companies experienced a business disruption due to a product compliance, safety or quality-related issue within the past 12 months. As would be expected, respondents reported higher incident rates in the consumer product, automotive, life sciences and industrial product industries.

 

“The stakes continue to rise on product safety and quality management,” says Don Mays, Deloitte Advisory managing director of product safety and quality with Deloitte & Touche LLP. “Lapses in product safety and quality can do significant financial and brand reputation damage. Taking a centralized, collaborative and analytics-enabled approach to effectively manage product integrity can help companies identify and respond to emerging issues more quickly.”

 

The good news coming out of the study is that almost 35 percent of the respondents said their organizations have secured predictive analytics technologies to support product safety and quality management. The flip side, however, is that slightly more than five percent of the respondents describe their use as “advanced.”

 

“Advanced analytics and data science remain largely untapped in product safety and quality management, often because it takes time and money to shift programs from largely manual, lookback efforts into centralized predictive coding,” says Derek Snaidauf, Deloitte Advisory principal in advanced analytics, Deloitte Transactions and Business Analytics LLP. “But early alerts and risk ranking of anomalous events can offer internal investigators the ability to react quickly and help head-off product quality and safety issues as early as possible. Well-run product safety and quality management analytics can also help improve compliance programs, customer satisfaction and brand perceptions while reducing quality management costs.”

 

I am reminded by this survey of a similar Deloitte survey last year, which found that although 42 percent of the automotive executives responding to the survey said they expect more industry recalls in 2015 and 2016, only eight percent said their organization uses advanced predictive analytics to help prevent, prepare for and manage recalls. What’s more, at the time, nearly 25 percent of the respondents said their company has no operational product safety and recall anticipatory analytic capabilities.

 

The problem, Snaidauf from Deloitte said at the time, is that many automakers still take a manual, rearview-mirror approach to vehicle quality and safety. However, leading OEMs are starting to adopt innovative analytic capabilities like proactive sensing for early issue identification and command centers for campaign management, he said.

 

“By cross-source correlating internal and external data sources, employing specialized advanced analytics, and leveraging interactive visualizations, these companies can improve customer satisfaction, vehicle safety, and brand perceptions,” Snaidauf said. “They also can realize significant reductions in their total cost of quality spend.”

 

Regardless of your industry, do you expect increased federal agency scrutiny of product safety? Secondly, do you think your company is fully prepared to manage a product safety or quality crisis?