Study: Consumers care about supply chain operations safety


glassessafetyCan you really increase profits and consumer satisfaction while running a more ethical, safer workplace? Recent studies have shown that many consumers report more loyalty to companies that have high safety standards, so this may be indeed true.

A recent study from TUV SUD America, a provider of product inspection services, investigated product safety practices across several industries and how company performance impacted consumer attitudes and experiences. Looking at five different markets, the research examined the way product safety, supply chain operations and certification requirements in the development of consumer electronics, children's products and food sectors affected consumer purchasing decisions.

Safety efforts improve profits 
When companies invest in higher safety standards, costly product recalls are generally avoided and sales increased in the majority of cases. The study revealed:

  • 46 percent of consumers have experienced unsafe products in the last five years
  • Consumers purchase from safe companies, not brand names only
  • 80 percent of consumers said certifications of product safety spur purchases
  • 87 percent of consumers are more likely to purchase items with safety information clearly stated on packaging
  • 9.5 percent of revenue can be lost to product recalls when safety standards lag
  • 85 percent of consumers will pay 15 percent more on safer products
  • 60 percent of consumers check company safety certifications before purchasing from a new brand
  • 84 percent of consumers believe third party safety testing of products should be involved in the supply chain process
  • 57 percent of manufacturers, distributors and retailers cannot trace certain components of the supply chain
  • 50 percent of manufacturers, distributors and retailers cannot guarantee products meet safety requirements throughout the supply chain

"Manufacturers, distributors and retailers in the United States have an opportunity to not only enhance consumer well-being but drive commercial success through a more systematic approach to product safety," said Ian Nicol, president and CEO of TUV SUD 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."

One way to implement new safety standards and oversight of practices is by launching a supply chain management project that connects all locations with information and training on how operations will change and what expectations have been heightened. Having this in place provides the ability to initiate company-wide safety changes on a unified platform that everyone can access and train on.

Global supply chains are constantly under scrutiny for management, safety and environmentally-friendly practices. Companies that fail to demonstrate a dedication to consumer safety, corporate responsibility and efficient operations can see their reputations damaged in a short period of time, and their client base snatched up by eager competitors. It’s almost every week that you hear about an automobile recall, children’s toy safety issue, oil spill or product defect that can trigger public outcry and boycotts. Recovering from a public relations nightmare like that can take months, years or the company’s profits may never fully recover.  

To learn more about improving your supply chain management practices and aligning them with consumer demands, please enjoy our free eBook on building the supply chain of the future.