Monday, April 20, 2015

Developing a Product Recall and Withdrawal Program for Your Organization

What is Product Recall & Withdrawal
As a whole, businesses place their best efforts in the design, production, and the selling of a safe product. According to various consumer safety organizations, the possibility of a defective product reaching a customer still exists. If you look at the current product liability climate for manufacturing, distribution and sales environment, a product recall plan is a necessity for all businesses. Today, consumers believe they enjoy safer, better products as a result of a companies’ willingness to conduct a product recall when necessary.  With millions of products being recalled over   the years, consumers no longer view product recalls in a negative light. How well a company conducts a timely, reasonable recall of a product can have a strong influence on consumers’ attitude about the company. Successful product recalls in the past have rewarded companies with continuing consumer support and demand for the products.

A product recall removes products from distribution, sale or consumption that present a significant health or safety threat because of a product defect or contamination. This can either be at trade or consumer level. Recalling food products can happen because of a report or complaint from manufacturers, wholesalers, retailers, government or consumers. It can also occur after the business itself has run internal tests and audits.

A product withdrawal, on the other hand, is where product is removed from the supply chain, but not for health and safety reasons. For example, if something has been labeled with the wrong weight, the manufacturer may want to withdraw it. But if the same product was labeled with the wrong ingredients and allergens, this would then be a recall. Manufacturers sometimes also withdraw products as a precaution, waiting further investigation of a potential public health risk. If that risk is established, the food must be recalled.

For an example, let’s say the unthinkable has happened where you’ve discovered a problem in your manufacturing line that affects a whole batch of products. Worse still, a full supply has already left the plant and hit the store shelves. What now? Is it a “recall” or a “withdrawal”? Does it matter? Yes, it really does and this is why: if you issue a recall notification but it’s actually a product withdrawal, you could find yourself paying out for media notices and other recall costs for no reason. On the other hand, if it’s a recall and you treat it as a withdrawal, the ramifications could extend to legal action. Knowing the difference between a recall and withdrawal means you can handle the situation quickly and correctly, saving you valuable time, money and stress. Here’s a guide we’ve put together on the key differences between a “product recall” and a “product withdrawal” that every manufacturer and brand owner should know.

Thus primary goal of a food recall is to protect public health by removing products from commerce that have been determined to be unsafe. A recall plan can aid in the execution of a recall by apportioning duties, centralizing current contact information, and providing pre-written templates for communications. Key Individuals that will be participating in a company recall should review the recall plan and be familiar with the execution of the plan.

Definitions
Class I Recall – A situation in which there is a reasonable probability that the use of, or exposure to, a violative product will cause serious adverse health consequences or death.
Class II Recall – A situation in which use of, or exposure to, a violative product may cause temporary or medically reversible adverse health consequences or where the probability of serious adverse health consequences is remote.
Class III Recall – A situation in which use of, or exposure to, a violative product is not likely to cause adverse health consequences.
Depth of Recall – The level of product distribution for the recall (consumer, retail, institutional, wholesale).
Distribution List – A product specific distribution list, which identifies accounts of customers or wholesalers, who purchased the recalled product. Requested information includes type of business, account name, addresses, and contact information.
Market Withdrawal – A firm's removal or correction of a distributed product which involves a minor violation that would not be subject to legal action by the regulatory agency or which involves no violation, e.g., normal stock rotation practices, routine equipment adjustments and repairs, etc.
Press Release – A notice that alerts the public (including regulators, retailers, consignees, other distributors, processors, and consumers) that a product presents a serious hazard to health. Not all recalls require a press release; the regulatory agency will advise the firm when a press release is necessary.
Recall – A firm's removal or correction of a marketed product that the regulatory agency considers to be in violation of the laws it administers and against which the agency would initiate legal action, e.g., seizure. Recall does not include a market withdrawal or a stock recovery.
Recall Committee – The group comprised of key staff with the expertise, authority, and responsibility to manage the recall.
Recall Plan – A written contingency plan for use in initiating and implementing a recall in accordance with stipulated law in the concerned country. The Recall Plan should be reviewed annually and revised as necessary when personnel, procedures, processes, suppliers, or as other factors change.
Recall Strategy – A planned specific course of action to be taken in conducting a specific recall, which addresses the depth and scope of recall, need for public warnings, and extent of effectiveness checks for the recall.
Scope of Recall – Defines the amount and kind of product in question.
Stock Recovery – A firm's removal or correction of a product that has not been marketed or that has not left the direct control of the firm, i.e., the product is located on premises owned by, or under the control of, the firm and no portion of the lot has been released for sale or use.

Preparing For a Product Recall
It is rare that any two recall programs will ever be identical. Therefore, companies should be prepared to address issues that invariably arise. For instance:
What is the defect that causes the product hazard?
What caused the product defect to occur in the first place?
Where are the unsafe products? How many are there?
Did the product fail to comply with government safety regulations? How?
Was the government or the appropriate regulatory body informed about the defect or lack of compliance has the company discontinued production and shipments of these products to distributors?
Has the company notified retailers to stop selling the product and asked them to help identify consumers who own the product?
Has the company started reviewing existing databases to identify potential product owners, e.g., product registration and customer service records?
Has a press release been prepared announcing the recall? What other forms of public notice are needed? Is the firm utilizing social media and digital and mobile communication platforms to get its message out?  If so, how will it do so? If not, why not?
Has a toll-free telephone service been set up that will be able to handle the number of calls expected after the recall is announced?
Has the firm’s website been modified to announce the recall and accept email requests to participate?
What is the company's estimate of the cost of the product recall campaign?
Is the company prepared to deploy manpower and/or fund an effort to provide replacement parts for defective products or to exchange them for new products that do not have the problem?
Has a plan been developed to ship replacement parts or new units to distributors participating in the product recall, or otherwise repair units in their inventory?
Has a plan been developed regarding the disposition of returned product?
How will the product be reworked, broken down for reclamation of critical components, or destroyed? Are procedures in-place to ensure proper control and tracking of all defective materials returned in the recall?
Is the company prepared to monitor the product recall and provide timely reports to the Commission on the progress of the recall?
How is the company upgrading its quality control or risk analysis procedures to prevent a similar product recall in the future?
This list addresses administrative and operational functions of a company involved in a product recall. Even if a product recall is merely potential, a company should be prepared to respond to the questions listed above.

When it comes to recalls, companies are legally required to communicate recall information to state and territory government agencies and industry groups. The business is also responsible for ensuring that the public is notified of the recall. 

To be continued 
Reference:
Sample Recall Plan: http://www.cdph.ca.gov/pubsforms/Documents/fdbRIgde23.pdf
Product Recall Guide: https://s0.hfdstatic.com/p/losscontrol/files/private/1287778604098.pdf
http://blog.matthews.com.au/index.php/product-recall-withdrawal-7-facts-every-manufacturer-know/

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