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:
Recall
Handbook: http://www.cpsc.gov//PageFiles/106141/8002.pdf
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
Regulatory
Procedures Manual: http://www.fda.gov/ICECI/ComplianceManuals/RegulatoryProceduresManual/ucm177304.htm
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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