By Clifford F. Lynch
DC Velocity, October, 2007
Recent headlines have given new meaning to the term "total recall."
For the past several months, we’ve watched product after product being pulled
from the market. From toothpaste to tires to toy action figures, most of the
recalled items have had three characteristics in common – they have been
produced (and therefore, must be recalled) in large quantities, they pose a
potential health and/or safety hazard, and they were manufactured in China.
That’s prompted a rush to judgment about reckless trade practices in China
(in all fairness, it should be pointed out that given the sheer volume of goods
imported from China, there’s a high statistical probability that if a problem
emerges, it will involve a Chinese manufacturer). And certainly, wherever the
fault lies, steps should be taken to prevent recurrences.
From a logistics perspective, however, the more immediate concern is how we
get the product back quickly and with as little harm to consumers – and damage
to the company – as possible.
The standard for product recalls was set back in 1982 when Johnson &
Johnson responded to the Tylenol crisis. Following the deaths of seven people
from cyanide-laced capsules of Extra Strength Tylenol, Johnson & Johnson
swiftly retrieved 31 million bottles from store shelves, offered free
replacements in a safer tablet form, and dealt with the problem openly and
honestly – a response that enabled the company to rebound from a tragic event
that might have destroyed the product line.
Since that time, many consumer-goods companies have developed procedures for
recalling products. But plenty of others have yet to lay out detailed recall
plans. That’s a risky situation. Every manufacturer and distributor should be
ready with a plan if the need arises.
How do you create a recall plan? Though different industries have unique
needs, there are six basic steps for establishing an efficient procedure. They
are as follows:
- Install and maintain a system for identifying product shipments to
individual customers by date and shift codes, plant of manufacture, and so
on. A good warehouse management system will facilitate this. Domestically
produced items usually have the necessary data stamped on the outer case.
With products manufactured offshore, however, it may be necessary to apply
labels containing whatever product information you can gather.
- Identify the types of recall situations that might arise and adapt your
plans to the level of risk. A product withdrawal due to a benign defect is
far less serious than a recall for health or safety reasons, and your
procedures should reflect that.
- Appoint a team of people who will take charge if a problem arises. Among
others, the team should include representatives from the supply chain,
marketing, legal, and product safety/quality groups.
- Establish the logistics process for the returns. Where should they go?
How will they be transported? How will they be isolated? How will they be
identified and accounted for? How will they be disposed of?
- Be forthright in your acknowledgment of the problem if the product being
recalled is potentially dangerous. Attempting to downplay the risks is
simply unacceptable and will likely backfire.
- Distribute written copies of the plan to key managers. Review it
periodically and modify it when necessary.
Remember that as a logistician, responsibility for recalls will likely fall
to you – as will accountability for any missteps along the way. But a little
forethought can save you a lot of grief. It’s worth keeping the
"6Ps" in mind: Proper Prior Planning Prevents Poor Performance.