Notre Dame study reveals new options to address recall uncertainty

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Product recalls can be painfully slow. Each day a recalled product remains in circulation the risk to consumer health increases. And to many, the underlying product recall process that food companies go through to identify and remove tainted products from the supply chain or why this process varies is a mystery.

 New research from the University of Notre Dame could help close the gap and fill the void in the literature between what we know and what we need to know about product recalls.

 The forthcoming study, “Food for Thought: Recalls and Outcomes” in the Journal of Business Logistics, looks at two key factors that drive recall uncertainty — upstream and downstream complexity. The study is led by Kaitlin Wowak, associate professor of information technology, analytics and operations in Notre Dame’s Mendoza College of Business.

The study revealed that two manifestations of complexity, upstream and downstream, introduce recall uncertainty, which is the driving force behind why the recall process varies.

 “This research is the first to propose that managers embed recall options into their decision-making when trying to manage recall uncertainty,” Wowak said. “Our study suggests that product recalls may not cleanly fall into recall categories as previously thought, but instead take the form of recall layering — that is, nested recalls or a recall within a larger recall. Understanding that recall layering may be present can help companies segment a recall to more effectively manage it.”

 Recall options give decision makers the opportunity but not the obligation to take certain actions in the future and can help managers make better-informed decisions as the recall process unfolds. Wowak says three recall options emerged from the study, all of which can provide major potential value under conditions of recall uncertainty.

The study suggests that recall layering can inform a firm’s strategy for how to effectively manage recalls as they evolve. For example, when a firm encounters the need for a recall, it can invoke different recall options depending on the nested recalls that surface within the larger recall.

“The specific nested recalls that emerge may change from recall to recall and could evolve as the larger recall unfolds, depending on the degree of uncertainty,” Wowak explained. “Assume a firm initiates a recall that has a high degree of upstream complexity. A nested recall within that larger recall could be effectively managed with a deferral recall option. Once the firm has a better understanding of the situation, the next nested recall that emerges may be effectively managed with a scale recall option.”

The study provides insights about which recall options may be used in various situations to help decision-makers manage the recall when facing uncertainty and makes designing, revising and improving the recall process more actionable for managers and scholars.

The full study can be found here.

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