Is your company prepared to deal with a Product recall?

Product recalls have the potential to seriously damage your reputation and brand name and can cause distrust amongst stakeholders and possible litigation, especially if it involves aspects of health & safety. In fact a shoddy product recall could results in untimely deaths.

The current product recall by Toyota is a prime example of what can happen to a company. Bad things can happen to good companies. In this case it is a removable floor mat that could cause accelerators to get stuck and lead to a crash.

Just imagine that you are the manufacturers of a product that could implicate the lives of babies. Just imagine that some dangerous bacteria manages to contaminate this product and you have shipped this contaminated products and they are in use at hospitals and clinics throughout Southern Africa.

What now? Lives are at stake!

How will you withdraw the product from the market and how will you inform all these outlets about the dangerous situation in a way that your integrity and reputation can remain intact and not be questioned?The trick lies in being prepared just in case it happens and then reacting swiftly to deal with it, both from a reality and a perceptual perspective. The difference lies in HOW these companies respond. That difference has its origins in how well prepared the business is to deal with the hand of fate. The companies that manages to weather the storm are normally those that are prepared to deal with the crisis and can communicate quickly and decisively.

But, how many small to medium size businesses even plan for this or even know what to do when such a situation comes around?

Perhaps the following checklist can be helpful as a planning and action guide. (Caveat – This checklist is only a rough guide. You should work with professionals before, during and after a product recall crisis. This checklist should be developed into a particular section of the completed crisis communication plan for the business and should constantly be updated. For an example of a complete crisis management template, you could consider obtaining REPUCOMM’s Crisis Manager Toolkit).

Do the following:

1. Define a recall (e.g. an event to effect removal of product from business because as a result of an identified hazard or problem) using your company or industry’s specific language.
2. Outline how the Company is to react once a recall is in effect and who/what declares a product recall, and what decides that a recall is over (These actions will be influenced by legislation particular to your industry, Industry association guidelines, bylaws, best practice, and organisations like the SABS – South African Bureau for Standards. Quick tip – The new Consumer Protection Act that is coming into effect in October also deals with this in various means -Consumer Protection Act, 2008 (Act No. 68 of 2008), Chapter 2 : Fundamental Consumer Rights , Part H : Right to fair value, good quality and safety, 60. Safety monitoring and recall.
3. Outline the product recall classifications and the Company’s responsibilities in each circumstance.
4. Define the process to identify affected product.
5. Define the traceback system and record keeping practices and where to find the information about who the product was delivered to and when.
6. Ensure that supplier and distribution (brokers, retail, wholesalers, etc.) contact lists are up to date and include as much contact information as possible. These lists should be updated either monthly or in real-time.
7. Investigate how you would inform the public. It is essential to plan for recalls so that you could for instance quickly and effectively be able to run an advertising campaign, especially if people’s lives are at stake.
8. Determine the required legal and other authority notification procedures for your industry.
9. Know what data the authorities or legal practitioners will require from the company in the event of a recall e.g: product(s) recalled (brand names, product names, code number, type of packaging); production codes and dates (sell by date or other identification codes); problem/reason for product recall; how/when hazard was discovered.
10. Know who will be the Company contact person and who will be allowed to speak to the Media. Make sure that this person is trained and well-versed with interviewing techniques.
11. Define the information necessary to vet the quality of product recalled (i.e. complete info on lots, production dates, distribution and location of product, accounting of all product, etc.).
12. Have on hand or get it compiled quickly – Any information on product distribution (i.e a complete breakdown of retail/non-retail distribution and amounts sent to retailers, etc.).
13. Prepare beforehand any relevant information on how to handle the product. This may be defined by MSDS (Material Safety Data sheets). For instance if the product is in use, how do you prevent contamination of localities i.e. water or air, etc.
14. Ensure that you plan beforehand how you will inform all stakeholders about an incident – the authorities, the Media, the shareholders, staff and customers.
15. Determine the procedures to handle the return of the product in a retail setting such as where customers need to hand the product back to a retailer, what the compensation procedures will be and how you will communicate with the consumer.
16. Set up procedures at the office to handle incoming calls. Ensure that your staff will be trained on what to say and to record. Will your Call Centre be able to handle the volume of calls?
17. Have you had a dry-run of your product recall procedure? Dusty procedures is of no use in a policy manual or on someone’s desktop. Regular training is a must.
18. Test your quality feedback monitoring systems. prevention is better than cure. If you can deal with problems before they occur, so much the better.

As you can see a product recall is not a simple exercise. Ideally you should plan beforehand and work with a number of identified experts to plan a potential recall. These experts could include HSE, PR and Legal practitioners.

If in doubt whether you need to go to this extent, remember that Noah built the ark seven days before it started to rain! (But he had access to divine wisdom)

Will you be able to say the same, if the hand of fate strikes? That you had prior wisdom?