Executive Briefings

When, Not If: Product Recalls and the Importance of Recall Planning

Whether it's a toy, automobile, medical device or food item, not a day goes by without news of another product recall. Unfortunately, recalls are a reality of the global economy and it truly is a matter of when, not if, a company will be impacted by one. Navigating a product recall tests customer relationships, puts pressure on the supply chain, affects sales and can paint brands in an unfavorable light. Given the serious nature of these and other recall execution challenges, it's critical that organizations have a recall plan in place long before an event occurs.

When, Not If: Product Recalls and the Importance of Recall Planning

When a recall strikes, there are numerous, simultaneous demands facing organizations. Communication with customers and distributors, coordination with regulatory bodies, and product retrieval and destruction all require attention. For global manufacturers, execution of a recall is even more complex because of the multiple international regulations and stakeholders involved. Developing and testing a recall plan that encompasses a variety of scenarios is key to success. Investing this time can make the difference between an event that irreparably tarnishes a brand's reputation or one that reinforces the company's commitment to high safety standards, the health and well-being of its customers, and transparent recall practices. With that in mind, the following are general best practices to aid manufacturers in the creation of a recall plan.

Consumer Notification

A key indicator of a recall's success or failure is how efficiently the organization is able to notify affected consumers. While government agencies are responsible for issuing product safety alerts, recalls, withdrawals and other relevant information, a company cannot rely solely on these external communications to reach all of the product's end-users. Rather, they must contact consumers directly through a variety of channels based upon the nature of the product, customer demographics, and more.

For some products, warranty registration and customer loyalty cards can help speed up this process. In other situations, manufacturers might be able to work jointly with distributors or other stakeholders to identify affected consumers. For example, medical device manufacturers can often coordinate with hospitals and physician practices. Whatever the case may be, it's important that companies have a sound notification strategy in place before a recall occurs. In addition, companies must prepare for the surge in customer service calls that generally accompany a recall announcement. This might mean having surge capacity within a call center to quickly scale, or ensuring that the microsite housing information about the recall is prepared to handle a high volume of traffic.

Documentation

Up-to-date documentation and records are an essential part of successful recall execution. In addition to warranty and customer loyalty databases, there are a number of other records manufacturers must maintain in order to efficiently manage a recall. Having access to quality control records by product line and production run can help manufacturers better determine the scope of the event and devise a targeted corrective action plan. Accurate, in-depth distribution records are essential for companies to track the extent of the recall and coordinate with distributors and other stakeholders.

Not only does this information help manufacturers execute a recall as efficiently as possible, it also enables companies to ensure regulatory compliance. Government agencies expect organizations to maintain complete and accurate records on their product safety efforts and will want to review this documentation prior to allowing a company to close out a recall. As such, manufacturers that take time to consider all elements of recall documentation and incorporate them into their recall plans are the best primed for success.

Product Retrieval

When a recall occurs, time is of the essence. Manufacturers must move as quickly as possible to remove affected products from the marketplace, but they also need to consider ways to minimize the cost of unaffected product being erroneously discarded from store shelves. Using a field retrieval force is an effective way of avoiding this unnecessary revenue hit while also ensuring that the recalled product is no longer available to consumers. In this model, companies tap regional retrieval teams to physically visit affected locations—distribution centers, retail stores, medical facilities and others —and separate affected and non-affected product. Assembling and coordinating with field retrieval teams can be a time-intensive process, so it’s important that manufacturers factor this into their recall planning process.

Another major consideration in any recall is storage requirements. It’s not uncommon for regulatory bodies to mandate that a company keep recalled product in quarantine for a period of time so that it can be inspected. Litigation or other activity associated with the recall could add additional storage requirements. In light of these variables, companies must plan to devote warehouse space to house the recalled product—or work with a recall execution partner to handle product retrieval, storage and ultimate destruction.

The International Element

In today’s economy, it’s increasingly common for manufacturers to experience global product recalls. These events bring an entirely new set of challenges to effective recall execution, and necessitate even more advanced planning and collaboration. Companies must be aware of regulatory requirements governing the global markets in which they are operating and have knowledge of the cross-border logistics of retrieving the affected product. A global recall also makes external communication more complex. It’s essential that all recall-related material is translated into local languages. Because a global recall is typically executed in each region simultaneously, there is no substitute for thorough recall planning and preparation when managing an international event.

While product recalls are certainly an inevitability in today’s environment, ensuring an efficient, effective response is no easy feat—even for the most experienced of manufacturers. That’s why it’s important that companies invest time and resources in developing a comprehensive recall plan. In addition, frequently testing the plan and putting teams through mock recall drills can reveal areas that need improvement and help companies further strengthen their response before a recall strikes. Working with a recall consultant is one way organizations can ensure that they have a solid recall plan in place for when—not if—they are faced with a recall.

Source: Stericycle ExpertSOLUTIONS

When a recall strikes, there are numerous, simultaneous demands facing organizations. Communication with customers and distributors, coordination with regulatory bodies, and product retrieval and destruction all require attention. For global manufacturers, execution of a recall is even more complex because of the multiple international regulations and stakeholders involved. Developing and testing a recall plan that encompasses a variety of scenarios is key to success. Investing this time can make the difference between an event that irreparably tarnishes a brand's reputation or one that reinforces the company's commitment to high safety standards, the health and well-being of its customers, and transparent recall practices. With that in mind, the following are general best practices to aid manufacturers in the creation of a recall plan.

Consumer Notification

A key indicator of a recall's success or failure is how efficiently the organization is able to notify affected consumers. While government agencies are responsible for issuing product safety alerts, recalls, withdrawals and other relevant information, a company cannot rely solely on these external communications to reach all of the product's end-users. Rather, they must contact consumers directly through a variety of channels based upon the nature of the product, customer demographics, and more.

For some products, warranty registration and customer loyalty cards can help speed up this process. In other situations, manufacturers might be able to work jointly with distributors or other stakeholders to identify affected consumers. For example, medical device manufacturers can often coordinate with hospitals and physician practices. Whatever the case may be, it's important that companies have a sound notification strategy in place before a recall occurs. In addition, companies must prepare for the surge in customer service calls that generally accompany a recall announcement. This might mean having surge capacity within a call center to quickly scale, or ensuring that the microsite housing information about the recall is prepared to handle a high volume of traffic.

Documentation

Up-to-date documentation and records are an essential part of successful recall execution. In addition to warranty and customer loyalty databases, there are a number of other records manufacturers must maintain in order to efficiently manage a recall. Having access to quality control records by product line and production run can help manufacturers better determine the scope of the event and devise a targeted corrective action plan. Accurate, in-depth distribution records are essential for companies to track the extent of the recall and coordinate with distributors and other stakeholders.

Not only does this information help manufacturers execute a recall as efficiently as possible, it also enables companies to ensure regulatory compliance. Government agencies expect organizations to maintain complete and accurate records on their product safety efforts and will want to review this documentation prior to allowing a company to close out a recall. As such, manufacturers that take time to consider all elements of recall documentation and incorporate them into their recall plans are the best primed for success.

Product Retrieval

When a recall occurs, time is of the essence. Manufacturers must move as quickly as possible to remove affected products from the marketplace, but they also need to consider ways to minimize the cost of unaffected product being erroneously discarded from store shelves. Using a field retrieval force is an effective way of avoiding this unnecessary revenue hit while also ensuring that the recalled product is no longer available to consumers. In this model, companies tap regional retrieval teams to physically visit affected locations—distribution centers, retail stores, medical facilities and others —and separate affected and non-affected product. Assembling and coordinating with field retrieval teams can be a time-intensive process, so it’s important that manufacturers factor this into their recall planning process.

Another major consideration in any recall is storage requirements. It’s not uncommon for regulatory bodies to mandate that a company keep recalled product in quarantine for a period of time so that it can be inspected. Litigation or other activity associated with the recall could add additional storage requirements. In light of these variables, companies must plan to devote warehouse space to house the recalled product—or work with a recall execution partner to handle product retrieval, storage and ultimate destruction.

The International Element

In today’s economy, it’s increasingly common for manufacturers to experience global product recalls. These events bring an entirely new set of challenges to effective recall execution, and necessitate even more advanced planning and collaboration. Companies must be aware of regulatory requirements governing the global markets in which they are operating and have knowledge of the cross-border logistics of retrieving the affected product. A global recall also makes external communication more complex. It’s essential that all recall-related material is translated into local languages. Because a global recall is typically executed in each region simultaneously, there is no substitute for thorough recall planning and preparation when managing an international event.

While product recalls are certainly an inevitability in today’s environment, ensuring an efficient, effective response is no easy feat—even for the most experienced of manufacturers. That’s why it’s important that companies invest time and resources in developing a comprehensive recall plan. In addition, frequently testing the plan and putting teams through mock recall drills can reveal areas that need improvement and help companies further strengthen their response before a recall strikes. Working with a recall consultant is one way organizations can ensure that they have a solid recall plan in place for when—not if—they are faced with a recall.

Source: Stericycle ExpertSOLUTIONS

When, Not If: Product Recalls and the Importance of Recall Planning