Plant Inspection Outcomes and Product Recalls: The Role of Inspector Experience

George Ball, Enno Siemsen, Rachna Shah
2014 Social Science Research Network  
Plant inspections enable supply chain partners to manage quality risk in global supply chains.. However, surprisingly little research examines the behavioral aspects of inspectors' work. Drawing on insights from the experience, learning, and complacency literatures, we examine the how well plant inspection outcomes predict future recalls and analyze the effect of inspector experience on both the information content of plant inspections as well as the prevalence of product recalls. Using
more » ... y data spanning a 7-year period in the medical device industry and a recurrent event Cox Proportional Hazard model, our results show that inspection outcomes contain information and hence predict future product recalls, and that this relationship is moderated by inspector experience. While general experience has no influence on the predictability of inspection outcomes, an increase in plant specific experience makes inspection outcomes an unreliable predictor of future product recalls; after an inspector's second plant visit, their inspection outcomes have little relationship with future recalls. Further, the hazard of recalls at a plant increases if the same inspector continues to inspect the plant, independent of the inspection outcome. Recall hazard increases by 48% the second time an inspector visits a plant, and 63% by the third visit. These results indicate the need to rotate inspectors among plants and have important implications for managers, regulatory agencies, and theory.
doi:10.2139/ssrn.2445022 fatcat:3akydv2fp5ckneskjdeaukd74y