Proper risk management strategies are essential for companies of all sizes, especially those that need to maintain a strong reputation with consumers and ensure their products sell. This means firms need to ensure the materials they source are harmless, as a contaminated ingredient or product can lead to an unsafe consumer good. Similarly, companies must guarantee the manufacturing processes that create their finished goods are proven safe and that no production mishaps can lead to issues once their merchandise is available for purchase. Some businesses are taking the initiative to revise their programs to ensure components and processes will result in nonhazardous consumer goods, but many are behind the curve and still can't prove their merchandise won't pose a threat.
A new study by TÜV SÜD America revealed consumers value safety above brand recognition and are concerned with the number of company recalls that highlight problems in common products. The survey revealed 46 percent of purchasers have had an experience with an unsafe product in the past five years and customers would be willing to pay 15 percent more to ensure the merchandise they buy is guaranteed to not have any problems.
Even though consumers are concerned, firms may not take every initiative to ensure their strategic sourcing and production are completely problem free. The data indicates 57 percent of manufacturers, distributors and retailers cannot trace the components they use and 50 percent aren't certain their whole supply chain would meet safety requirements.
"Manufacturers, distributors and retailers in the United States have an opportunity to not only enhance consumer wellbeing but drive commercial success through a more systematic approach to product safety," said Ian Nichol, president and CEO of TÜV SÜD America. "Contrary to popular belief, significant safety improvements can be made with limited resources, by working together with suppliers for instance, standardizing safety requirements throughout the supply chain."