The Freight Dawg has blogged (sorry, I just can't bring myself to use his term) about recalls and how Visibility systems are crucial in managing them. I'll add that just knowing where a few thousand cases of peanut butter are within your supply chain is not enough. You need to know lot numbers to isolate the bad product and historical information in case you need to backtrack to the origin of the problem. And you need additional visibility to keep track of what's been contained, e.g. product on hold in the warehouse, interrupted deliveries, etc. Finally, you need insight into your upstream suppliers' inventory so you can determine how to replenish your supply chain the most efficiently. With the right systems in place, you could recall and replenish almost simultaneously to minimize the disruption, not to mention the bad press.

Link: Eric Joiner's Freightdawg.com - The Logistics and Supply Chain Blog!: Recall: CIO's Loom Large in Reclaiming Damaged Product.