Takata Air-Bag Recalls Expand to 34 Million Cars in the US

A large focus of Chapter 8 focuses on Supply Chain Management and how it effects business-to-business relationships. An advantage to having a supply chain management system in place is to maintain good corporate social responsibility. A common issue that many organizations face is product recalls. Having an effective supply chain management system in place can help manage where the products being recalled have traveled in shipments. When business is being conducted on an international basis it is a possibility that defects that occur at the beginning of the supply chain filter out to other countries and often go undetected until a consumer purchases the product. This is why it is important for companies, especially suppliers, to know where their products travel and who those products have been sold to.

Many of us are familiar with the most recent consumer product recall to hit the United States, the Takata Air Bag recall. The United States Transportation Secretary believes this to be the most complex and largest recall for a consumer product in United States history. Back in the 1980’s Tylenol’s recall scandal only called for a recall of 31 million products; Takata’s number has reached 34 million vehicles and this number could potentially keep growing. Takata’s airbags are said to be overly aggressive when they explode and sometimes eject sharp metal fragments into the car when they explode. So far six people have died and over one hundred have been injured when the airbags have ejected. Takata believes the airbag defects could be a result of high humidity and moisture in the air but are not certain. Takata has sold millions of airbags to car manufacturers over the years, especially Honda, Toyota, and General Motors. It is believed that Takata air bags make up 14% of current airbags on the road in the US. It could take months to years for this recall to be fully resolved.

Discussion Questions:

1. Have any of you been a victim of this particular recall or another recall in the past? Were you satisfied with how the company resolved the issue and did it alter your opinion of them?

2. Why do you think product recalls go unnoticed until the consumer receives the product?

3. What changes if any, could Takata make to its supply chain management to ensure that another recall such as this one does not occur again in the future?

http://www.wsj.com/articles/air-bag-recalls-expand-sharply-1432057549