Despite expected rise in regulatory scrutiny, few are prepared to manage product safety crises
New York, Oct. 5, 2016—While 42.1 percent of respondents to a recent Deloitte poll expect government agency scrutiny of product safety to increase through 2017, just 15.1 percent are fully prepared to manage a product safety or quality crisis. One-fifth (19.2 percent) of respondents reported that their companies experienced a business disruption due to a product compliance, safety, or quality-related issue within the past 12 months. Respondents reported higher incident rates in the consumer product (38.5 percent), automotive (36.4 percent), life sciences (35.6 percent), and industrial product (34.8 percent) sectors.
“The stakes continue to rise on product safety and quality management,” said 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.”
More than one-third (34.6 percent) of respondents’ organizations have secured predictive analytics technologies to support product safety and quality management, but just 5.6 percent 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,” said 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.”
Snaidauf continued, “Well-run product safety and quality management analytics can also help improve compliance programs, customer satisfaction, and brand perceptions while reducing quality management costs. It’s tough to deny their utility in powering performance improvements.”
About the online poll
More than 1,400 professionals participated in a Deloitte Dbriefs webcast, titled “Product quality and safety management: An end-to-end, data-driven approach,” held July 19, 2016. Poll respondents were from sectors including technology (7.4 percent); retail, wholesale and distribution (6.5 percent); travel and hospitality services (6.4 percent); consumer products (4.8 percent); industrial products and services (4.7 percent); life sciences (3.7 percent); and automotive (3.3 percent).
About Deloitte Advisory
Deloitte Advisory helps organizations turn critical and complex business issues into opportunities for growth, resilience, and long-term advantage. Our market-leading teams help our clients manage strategic, financial, operational, technological, and regulatory risk to enhance enterprise value, while our experience in mergers and acquisitions, fraud, litigation, and reorganizations helps clients emerge stronger and more resilient.
As used in this document, “Deloitte” and “Deloitte Advisory” means Deloitte & Touche LLP, which provides audit and enterprise risk services; Deloitte Financial Advisory Services LLP, which provides forensic, dispute, and other consulting services; and its affiliate, Deloitte Transactions and Business Analytics LLP, which provides a wide range of advisory and analytics services. Deloitte Transactions and Business Analytics LLP is not a certified public accounting firm. These entities are separate subsidiaries of Deloitte LLP. Please see http://www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.