Product recall scares a priority for global firms
Most global manufacturers believe that there is a genuine risk in sourcing products from emerging markets, according to a new report.
A year of high-profile recalls has seen product safety, product quality and environmental standards in emerging markets rise up the boardroom agenda, according to the study from consultancy Deloitte.
Seventy-eight per cent of the global manufacturing executives surveyed feared financial and reputational risk in sourcing from suppliers in emerging markets.
However, sourcing successfully from emerging markets is not a question of avoiding these risks, the report says, but managing them effectively through enhanced vendor selection, testing, monitoring, and contract provisions.
Although implementing these more rigorous standards likely to result in higher operating costs, manufacturers have the opportunity to turn this challenge into a competitive advantage ̵1; by building brand equity and commanding higher prices by providing guarantees that their products meet the strictest standards.
The report, ̵6;Innovation in Emerging Markets: 2008 Annual Study̵7;, is available at www.deloitte.com/manufacturing
Image: Some toys made in China had to be recalled last year