Tuesday, April 28, 2015

How to Execute a Product Recall - I

How to Plan a Product Recall
A company that undertakes a recall should develop a comprehensive plan that reaches throughout the entire distribution chain to consumers who have the product. The company must design each communication to reach affected consumers, motivate people to respond to the recall and take the action requested by the company. No matter how reliable your manufacturing processes are, you need a formal recall plan to ensure your customers’ safety and your brand’s reputation. Many major retailers stipulate that their suppliers must have separate written procedures identifying the difference between a product withdrawal and a product recall and how they both should be handled.

When it comes to recalls, companies are legally required to communicate recall information to state and/or territory government agencies and industry groups. The business is also responsible for ensuring that the public is notified of the recall. It is company’s responsibility to notify the relevant authorities.  In contrast, when a company decides to voluntarily withdraw a product from the market, there are no such legal requirements and withdrawals don’t need to be notified to authorities. That said, the company should still conduct the voluntary recall with the same level of efficiency and care as if it were a mandatory recall.

Once the staff and a company agree on a remedy to correct a product defect, the staff works with the company to put together an effective plan for public notification and implementation of the recall. The information which must be communicated to the general public must be included in the corrective action plan. A plan must include the company's agreement that the relevant authorities will publicize the terms of the plan if necessary to inform the public of the nature of the alleged substantial product hazard and the actions being undertaken to correct that hazard.

The objectives of a recall are:
To locate all defective products as quickly as possible;
To remove defective products from the distribution chain and from the possession of consumers;
To communicate accurate and understandable information in a timely manner to the public about the product defect, the hazard, and the corrective action. Companies should design all informational material to motivate retailers and media to get the word out and consumers to act on the recall.

In determining what forms of notice to use, the paramount consideration should be the level of hazard that the recalled product presents. Class A hazards warrant the highest level of company attention. Other considerations include where and how the product was marketed, its user population, the estimated useful life of the product, and how the product is most likely to be maintained and repaired.

A company conducting a recall must take particular care to coordinate the notice portion of the recall so that all participating parties, including traditional and on- line retailers, have sufficient advance notice so that they can carry out the actions agreed upon. Notice also needs to be balanced—the purpose of some elements, such as news releases, press conferences, and video news releases—is to get the media to publicize information about the recall widely. Other elements, such as advertisements and posters, ensure that the information is available to the public throughout the course of the recall and helps reaching consumers who did not hear the original announcement.

1. The Recall Coordinator
Considering the product recall as a collective effort that generates much bigger effects in customer satisfaction, a company must first identify or designate a company official or employee to serve as the “recall coordinator”. The individual must have full authority to take the necessary steps (including reporting to the Consumer Product Safety Authorities) to initiate and implement all recalls, with the approval and support of the firm’s chief executive officer who should ensure that the steps of the recall are completed by the engagement of entire staff. The recall coordinator may also act as the contact person to relay information to the relevant authorities about the recall. The recall coordinator is responsible for overseeing the complete execution of the product recall by the company and its employees as well as the external parties, who’s engagement is mandatory for carrying out the recall such as buyers or retail sellers.

The recall coordinator should have the following qualifications and duties:
Knowledge of the statutory authority and recall procedures of the any other relevant line authorities as well as ability and authority to function as the central coordinator within the company for receiving and processing all information regarding the safety of the firm’s products. Such information includes, i.e., quality control records, engineering analyses, test results, consumer complaints, warranty returns or claims, lawsuits, and insurance claims. Responsibility for keeping the company’s chief executive officer informed about reporting requirements and all safety problems or potential problems that could lead to product recalls. The person must also have the responsibility for making decisions about initiating product recalls. In addition recall coordinator must have authority to involve appropriate departments and offices of the firm in implementing a product recall and responsibility for serving as the company’s primary liaison person with line authorities.

2. Identify Recalled Products
It is unlikely that any two recall programs will ever be identical. Therefore, company should be prepared to address issues that invariably arise. For instance:
What is the defect that causes the product hazard?
What was the cause of the product defect?
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 affected product(s) to distributors?
Has the company notified retailers to stop selling the product and asked them to help identify consumers who may have purchased the product?
Has the company started reviewing existing databases to identify potential product owners, i.e., product registration and customer service records?
Has a press release been prepared announcing the recall?
What other forms of public notice are needed?
Has a toll-free telephone service been set up that can handle the volume of calls expected after the recall is announced?
What is the company’s estimate of the cost of the product recall campaign?
Is the company prepared to deploy manpower and/or fund efforts necessary to provide replacement or replacement parts for defective products?
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?
Is the company prepared to monitor the product recall and provide timely reports to the relevant authorities on the progress of the recall?
What steps if any are underway to upgrade the company’s quality control or risk analysis procedures to prevent a similar product recall in the future?
What are the other consequences company has to consider?

The given list represents some administrative and operational functions of a company involved in a product recall. In case of a product recall, a company should be prepared to respond to the questions listed above and any others that may arise.


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/

Developing a Product Recall and Withdrawal Program for Your Organization  

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