No organization wants its product to be recalled from the market, however, it is always recommended to have your supply chain recall ready, in case of exigency. This is because product recall, if not handled properly, is no less than devastation and has the potential of bringing any organization to bankruptcy. The loss is not just financial, but it also questions the trust and integrity of the business in the market.
Let us look at some of the household names that faced the biggest product recalls in global history. In 2016, Samsung was forced to recall its 2.5 million Galaxy Note 7 phones after the striking news of battery explosions from across the users that costed Samsung a loss of $5.3billion. In 2005, Pfizer suffered a product recall loss of $3.3billion when the Foods and Drugs Administration ordered it to pull an arthritis painkiller, Bextra, off the market because of its life-threatening side effects. In the case of pharmaceuticals and consumable products, product recalls are ever more trickier as the threat to life can put the companies to risk and grind them in the legal and criminal allegations for decades.
Hence, it is the urgent need for businesses to have a recall ready supply chain to handle the situation with speed and accuracy in times of exigencies. For this, the supply chain should have the visibility to its product at all times.
Organisations today face challenges in terms of lower visibility throughout their supply chain, which results in poor performance during product recall. In this article, we will discuss the process of product recall and what are the problems one might face during an effective product recall. This article will also help you find if your organisation is recall-ready.
Product recall is basically the process of calling your products off the market in case of safety, legal or regulatory breach. Visibility, smooth and accurate flow of information across the supply chain, infrastructure availability, responsive infrastructure for information sharing, and logistics network are some of the necessities of an efficient product recall system.
The process of product recall is tedious and needs detailed monitoring in each stage, owning to its criticality. In any product recall, preparation starts with setting up a target on what products need to be recalled and from where.
The information needs to be shared with all the nodes of the supply chain to check the preparedness of the recall. This information sharing is bi-way, and the set of actions are decided with mutual discussions. All these processes are done within the constraints of time and legal compliance. Hence, it is necessary to have a dedicated platform, set of regulations, and team to ensure the completion of the entire recall life cycle. Here are the common product recall problems that will help check your readiness for product recall.
- Lower Visibility: Visibility is the ability to oversee what is happening within the system at the granular level. If you can answer questions like what quantity of product you have at any point in time, their location across the supply chain, their remaining shelf life, their legal and quality compliance reports, etc., then you can say your supply chain has visibility. Many organisations lack this end-to-end traceability. They cannot tell where their products are located at any point in time. In such cases, they cannot act upon the recall order because they don’t know what to retrieve, in what quantity, and from where. Without setting the objectives and target, actions cannot be taken, and hence, such organizations face major failure in case of the product recall.
- Ineffective communication: Communication is always the most important part of any result-oriented process. Without effective communication, product recall cannot be successful. The objective of communication is to initiate the retrieval process by communicating the goals for recall, notifying the importance and repercussions in case of recall failure, checking up on the progress, getting frequent feedback from different supply chain nodes, help them resolve their individual product recall issues and then finally communicating the success once the recall is completed. Here, the global language of business comes handy to ensure that effectiveness of communication.
- Information accuracy: Sharing accurate information is one aspect of communication that requires special attention. Many organizations face the issue of information mismatch due to inaccurate information sharing.
Consider a situation where inventory stock level at a particular location is very high, but the data shared through excel files show only a small amount. Based on this data, the recall team plans to retrieve the small amount of inventory but, upon arrival at the site, encounters the huge pile of stock for relocation. Such a situation will not only increase pullback cost but also raise tension within the organization that will ultimately reduce its effectiveness.
- Compliance issues: Legal compliance is one of the significant factors that need to be considered during recall planning. The time sensitiveness of the recall operation makes it difficult to manage and comply with the regulatory norms. Hence, it is beneficial to have a facility to keep track of all the legal licenses and quality agreements. It helps prevent product recalls and makes product recall easier to process when it remains the only option.
Having an effective product recall ensures the ability of the supply chain to quickly respond to recall situations, reduce the cost associated with a product recall, reduce legal risk due to timely withdrawal of recalled products, and increased consumer safety.
DatakartTrace, a traceability solution of GS1 India, can help you deal with all the product recall problems and achieve effectiveness in the product recall process.