Five Best Practices for Product Recalls

More than 628  foods and hard goods have been recalled so far this year, amounting to at least 60 million individual items and 33 million pounds of food, according to records of the Food and Drug Administration (FDA), Department of Agriculture (USDA), Consumer Product Safety Commission (CPSC) and National Highway Traffic Safety Administration. That’s a lot of stuff swimming upstream against the supply chain tide. So assume you will get hit by a product recall, and get ready to provide clean, complete data to senior executives working to mitigate the damage.

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Here are five ways to prepare for the inevitable:

1. Create an R-team. Designate a recall task force of managers from sales, customer service, manufacturing and IT. Tap people from supplier relations, say, or transportation, as needed. Everyone should be trained in how to query each other’s core applications, and how their respective data meshes to tell the story of how a product went bad, the scope of the problem and where it lives inside the supply chain.

2. Study up. Read the investigative procedures of the CPSC, FDA and USDA to understand what data inspectors will request during a recall. IT should work with plant managers to figure out how quickly and completely they can supply the data.

3. Practice. Do a mock recall. Along with disasters and terrorist attacks, recalls are one of the risks the IT group at Procter & Gamble practices handling, says Steve David, former P&G CIO. Choose a batch number for a real group of products, he advises. Then, using supplier, manufacturing, distribution and transportation systems, run reports to try to account for what was made, shipped and received. How accurate were those practice reports? Where and when did manual work, such as questioning the plant manager in person or calling the trucking company, become necessary? How long did it all take?

4. Study the masters. Pharmaceutical and aerospace companies can trace the pedigree of their finished products back to the component level. They even know what the temperature in the factory was when the widget or pill was made. They can do this because federal regulations require that level of detail for public safety. Evaluate whether practices and procedures they follow could work for you.

5. Reach out. Use the Web to communicate with consumers, taking some of that burden off the retailers. Mattel, for example, regularly freshens its site with information about ongoing recalls, plus images and video to answer consumer questions. This helps divert at least some consumers from bringing questions and old products to Mattel retailers. “The last thing Mattel wants is to have millions of products handed to retailers, causing a huge logistics problem,” says Harvard Business School professor John Quelch. “It’s vital for any manufacturer to minimize negative impact and inconvenience to retailers.”

Copyright © 2007 IDG Communications, Inc.

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