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SAP INSIGHTS
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September 20, 2022
Things come and things go ... and sometimes go wrong. So very wrong. Product recalls are a fact of business, whether in practice, in theory, or both – which is to say that if you haven’t been through a recall yet, statistically there’s a good chance you will at some point. Being prepared in case of an emergency is the way to a good recall plan that minimizes damage and diverts possible disaster. Read on for tips on how to get a solid recall plan in place. Then we talk about how simply improving processes can lead to a more sustainable business. And lastly, if you're involved with manufacturing, now may be the time to review your enterprise resource planning (ERP) system and investigate if updating will provide that competitive edge (spoiler alert: yes).
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Digital Business
Perfect Recall
Maybe inevitable; certainly manageable. No point in sticking your head in the sand when it comes to product recalls. There were over a billion units of recalled products in 2021. Even though we know you do everything absolutely perfectly, a wide range of stuff happens, some of which is outside a manufacturer’s or brand’s control. Putting in place a solid product recall plan before it’s needed is the key to both mitigating losses and running an efficient recall. Easier said than done, for sure – supply chains, production networks, general globalness, and other aspects of making things today are complex. Communicating clear recall information that maintains consumers’ trust takes planning. Uncovering exactly what went wrong and where is a challenge.  

Moving for improving. But that challenge can be overcome, with some effort. Better data, access to it, and info-sharing across the supply chain helps identify problems and trace them back to their origins. ERP systems are designed to monitor products as they’re made, and additional technologies can improve track-and-trace. But one powerful way of improving supply chain quality is by limiting how far products need to travel. Moving manufacturing back to home markets has many benefits. One is that it limits the likelihood that something will go wrong in transit; another is that regulatory compliance is a lot simpler when there are fewer country obligations to manage.

Fire drill. Okay, you’ve got all your recall ducks in a row. Now what? Practice. Doing mock recalls will uncover what needs improving in your recall plan and familiarize those responsible for managing a recall with the processes and regulations. Since it’s likely that a recall will happen sooner or later, how a company manages that process is crucial – reputations are on the line. Honest communication with customers and suppliers detailing the steps being taken to make things right, including how a product is being made safe in the future, will help build trust. You’re showing not only that you’re on the ball with one recall but also that you prioritize your customers’ well-being. And that is worth the work.
Break out your megaphones and go: “On the Path to Better Product Recalls.”
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Planet and People
Sustainable Operations Are Becoming a No-Brainer
Running a more sustainable business doesn't necessarily mean upheaval. In some cases, just doing what you're doing, but doing it better, is enough to make a meaningful difference. Improved data quality and analysis, advancing technologies, and manufacturing production developments are causing greater sustainability while bringing business improvements. And that means a better balance sheet and happier customers.
Improvements everywhere. We're seeing consistent and hopeful improvements in the technologies that support sustainability. Think of batteries: researchers are creating new formulations that charge better, last longer, and can be broken up once they're used up to become part of the circular economy instead of the landfill. This pattern is repeating in many areas: better building materials, better textiles, better agricultural processes that are foundationally better for the planet. Sometimes iterations are enough to create significant improvements.
Let’s get green: “The Future of Sustainable Operations: How to Make Green Part of Your Day-to-Day.”
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Fundamentals
Head in the Clouds  
Manufacturing has gotten more complex, but many manufacturers still rely on old ERP systems that weren't designed for today's heavy lifting. Think of how supply chain disruptions, extended providers, and customer systems, among other things, have reshaped manufacturing. Using a cloud-based ERP helps better manage these issues in a world where change seems to be constant. The ability to manage and share in the cloud opens possibilities for collaboration, better coordination, better regulatory compliance, and customer data that can preemptively address issues and improve customer relationships.  
Cloud building. Cloud ERP solves some of manufacturing's biggest pain points. That includes better management of inventory and production so that there's not too much, not too little, but just enough resources and product available. Fold into that improved lean manufacturing and simplified production and assembly, then follow up with improvements in quality management. With better data, analytics, and real-time or close-to-real-time updates, making things has never been easier.
Read more: "Cloud ERP for Manufacturing: Now More Than Ever."
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The Big Ideas Your Colleagues Are Reading
Kick-start your week with the SAP Insights stories that are most popular with other digital business executives:
Future of Work
Simple, Relevant, Timely: The Art of Employee Engagement Through E-mail
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Planet and People
Profitable Purpose: The Future of Business Sustainability
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Fundamentals
What Is the Industrial Internet of Things (IIoT)?
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Three Stories That Haven’t Hit Your Inbox
Highlighting the best research about technology intersecting with the future of business, the future of work, and the future of innovation.
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Hot loss. Heat waves cost businesses – and not just because the air-con is on mega-blast. High heat takes a financial toll in the form of lower sales numbers and narrower profit margins, and the intensity of the heat has a bigger effect than the length of the heat wave. Does your company have a heat strategy? Without one, your profits may be burning up. (The Conversation)
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Turnover toll. While it's well known that employee turnover costs companies money, it's often thought to be associated with recruiting, onboarding expenses, and the like. But turns out that the costs can go further; product quality and reliability can also suffer. It's good business sense to keep employees happy – and in their jobs. (Knowledge at Wharton)
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Up in smoke. Employees are burned out. What are you doing about it? Workers need to feel confident that their employers have their backs, and trust comes from action, not vague promises. Try the TRIAL framework (trust, reflection, insight, action, lead) to find answers to burnout ... or your people will burn a hole in the door as they leave. (Harvard Business School Working Knowledge)


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