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Recall mayhem spurs supply chain problems

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Recall mayhem spurs supply chain problems

All you need to be convinced that 2014 is the year of the recall is to just take a look at GM and Toyota’s tally so far, with the duo being the most prominent automakers with safety issues, not the only ones.

In the US alone, the automakers are well en route to breaking the all time record for recalled cars – with GM alone calling back almost 14 million cars, and for a good measure of comparison you should know that the forecasted annualized selling rate for 2014 (yes, that means all the market for new car this year) is of around 16.8 million cars.

As unit amounts “are soaring drastically,” said Stericycle Recall Index vice president Mike Rozembajgier. “This puts stress on the supply chain to produce replacement parts, taxes auto dealerships and used car networks, and further complicates the consumer notification and communication process.”

And, if the public relations issues stemming from the huge recalls are not enough, imagine what the disgruntled customers would do to the brand when finding out they were programmed for a repair… sometimes next year. That’s because the huge number of recalls, involving auto parts from tires to child seats, puts an incredible amount of pressure on the automotive supply chains.

Just think about the news – coming from GM itself – that only around 50,000 cars, of the roughly 2.6 million recalled for the defective ignition switch, had the part replaced by April.

Via Forbes

by Aurel Niculescu (my Google+) - Friday, June 13th, 2014 - filed under Industry, News. Image credit: .
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