A product recall is tantamount to a kiss of death in certain segments of the economy, especially for food and other agricultural products. Not so much in other areas such as in the automotive market where manufacturers, led by General Motors, have this year recalled millions of vehicles. The electronics industry falls somewhere in between these two economic sectors but the impact of a recall due to defects in performance or other reasons can be equally severe, leading to significant decline in market share and huge losses.
Recalls aren’t common in the electronics industry and even when OEMs, especially in the consumer and white goods segment, issue a defect notice many people don’t directly associate the incident with specific technology in the product. The component supplier may have caused the incident leading to the recall but it’s the OEM that takes the public beating. In other words, the OEM gets blamed as it has happened with General Motors, Toyota Motor Corp., and Chrysler, which on Oct. 29 announced the recall of more than 300,000 vehicles due to faulty “electrical connectors of the diesel fuel heater, which may overheat, causing a leak in the fuel heater,” according to a statement issued by the National Highway Traffic Safety Administration (NHTSA).
While OEMs may be blamed by regulatory authorities and endure a public drubbing for any recalls, the suppliers hardly get off free. In fact, a supplier whose faulty component or subsystem results in a product recall not only faces high financial losses but may lose major contracts not only with the impacted OEMs but also other customers. This is why the electronics industry puts a great deal of importance on product reliability both at the components and finished equipment levels. It also means the supplier and the OEM are joined at the hips and must work closely together to ensure the integrity of the finished goods.
So, what do best-in-class companies recommend to avoid costly product recalls? We boiled their suggestions down to the following 10 critical points:
- Design Integrity: From the conception stage all through the initial design phase, make sure the product at its embryo stage is as fault-free as possible. It’s better to take ample time to ensure the design is good than endure repeated redesign during which additional problems can be injected into the product.
- Don’t Skip or Skimp on the Test Phase: This may seem very obvious but failure to sufficiently test a design can result in greater problems down the road. Additionally, the prototype must be subjected to necessary failure analysis and repeatedly to eliminate potential problems. Faults identified during this phase can be more easily corrected than if the issue was kicked down the road.
- Design for Manufacturability: DfM is today considered an integral part of the design and production process but many companies still equate this with design testing. It’s not the same. “Effective product development must go beyond the traditional steps of acquiring and implementing product and process design technology as the solution,” wrote Kenneth Crow in a paper written for DRM Associates. “It must address management practices to consider customer needs, designing those requirements into the product, and then ensuring that both the factory and the virtual factory (the company’s suppliers) have the capability to effectively produce the product.” Crow noted that decisions made during the design phase can account for up to “70 percent of the product’s costs while decisions made during production only account for 20 percent of the product’s costs,” which means assuring design for manufacturability can yield great results.
- Check and Double-check all Parts of the Supply Chain: A great design can fail if the supply chain does not provide the necessary support to guarantee success. In addition to securing a viable design a manufacturer must have an excellent support system with suppliers, contractors, software developers and a sales outreach that on their own double-check their systems to make sure these are optimized to support the product.
- Verify History and Record of the Supplier: A supply chain is only as good as its components. In the electronics industry this is a cardinal principle of an effective and efficient product management system. A single OEM product can have components from dozens of suppliers and an effective failure monitoring system must look deep into the supply chain. Each layer must be closely scrutinized and processes put into place to ensure accuracy of reports. Many OEMs rely on a core group of suppliers to assure the integrity of their products. These suppliers are often listed on the Approved Vendors’ Lost (AVL), which can be shared with and sometimes managed by an electronics manufacturing services (EMS) provider. This list must continually be evaluated with new players added and some older ones removed as necessary. It must never become a static list.
- Stay Abreast of Rules and Regulations: Environmental and other compliance requirements have ballooned in recent years and across multiple geographies. The acronyms alone tell a story of an industry being closely monitored. In the last two decades regulators in Europe, Asia and North America have asked manufacturers to comply with REACH, RoHS and WEEE. If you don’t know what they mean that’s already a problem. Failure to comply with these three regulations or the US-driven rule on “Conflict Minerals” is guaranteed to result in product recall.
- Ensure Tighter Collaboration between Distributors, Suppliers, EMS Providers and OEM: All segments of the supply chain must work tightly together to avoid product recalls but harmonizing the relationship is the main task of the OEM. The equipment vendor must bring all members of its supply chain together early in the product design stage and ensure they work as a team. Oftentimes, that duty is delegated to the EMS provider but in recent years some distributors have stepped up to provide this service. Digi-Key Corp., for example, is helping some of its customers with their volume purchase requirements even while keeping its focus on servicing design engineers, according to Dave Doherty, executive vice president of operations.
- Secure the Manufacturing Floor: Even if you are using a contract manufacturer who owns the assembly plant you are still entitled to efficient, fault-free production environment. While the OEM may not own the property, it has the right to inspect the production facility and ensure the contractor complies with regulatory requirements. Failure to do this could result in a product recall that may be forced upon the manufacturer by regulators not because of a problem with the product itself but for failing to comply with the law.
- Secure the Shipment: Assume the product is not safe until delivered intact and unspoiled to the end-customer. Some product recalls occur because of damages suffered after production rather than as a result of defects in parts or problems on the manufacturing floor. This week, for instance, Toyota announced the recall of 170,000 Camry sedans in the United States and Europe “over faulty ball joints that may have been damaged during shipment” and which could make drivers lose control of the vehicle.
- Have a Crisis Response Team: Product failure may occur despite all efforts by a manufacturer to avoid it. Beyond the actions above, manufacturers must have a plan in place to deal with identified problems in order to determine the appropriate response. A software update can resolve some problems, for example, eliminating the need for a more expensive product recall. The crisis response team should also be charged with closely monitoring the product through the design and production stages and also oversee post-production activities to identify problems and deal promptly with them.
The following is a list of some reasons vehicles were recalled in October and November. The list is from the NHTSA:
- November 5: 6,562 Infiniti vehicles from 2013-2015, including Q70 and M35 hybrid models, Recalled for a potential software error which may cause unexpected acceleration.
- November 5: 135 Pierce emergency vehicles from 2009-2013, including Quantum and Velocity models, Recalled for front lower control arms that may crack and fracture.
- November 4: 5,412 Infiniti hybrid vehicles from 2014, including Q50 and Q70 models, Recalled for a software error which may cause the electric motor to stop working.
- October 29: 314,704 Chrysler vehicles from 2010-2014, including Ram 2500 and 5500 models, Recalled for the electrical connectors of the diesel fuel heater which may overheat, causing a leak in the fuel heater.
- October 29: 132,223 Chrysler vehicles from 2014, including Dodge Durango and Jeep Grand Cherokee models, Recalled for an issue with software that may disable the Electronic Stability Control.
- October 28: 37,145 Mitsubishi Outlander vehicles from 2007-2009, Recalled for the brake light switch which may malfunction, causing the brake lights to not illuminate.
- October 24: 87 RevZilla size large motorcycle helmets, including Roadster PG and Window PG models, Recalled for not being adequately labeled with the correct size information.
- October 20: 434,581 Chrysler vehicles from 2011-2014, including Dodge Charger and Durango models, Recalled for the alternator which may fail, causing the engine to stall.
- October 20: 189 Acura TLX AWD vehicles from 2015, Recalled for incorrect labels regarding weight, which could potentially result in tire failure.
- October 15: 198 Keystone Hideout 308BHDS fifth wheel trailers from 2014-2015, Recalled for an outlet that is not part of a GFCI protected circuit, which could increase the risk of electrical shock.