This blog describes how traceability solutions can help companies do targeted and efficient recalling of products.
- What is Product Recall?
- Cost of Product Recall
- Steps of Product Recall
- Traceability Solutions for Recall
What is Product Recall?
Product Recall is the process of removing products from the market in case of product safety issues or defects, which could lead to risks to consumers. Products may also be recalled in case of non-compliance with regulations.
Product recalls may be done voluntarily by a company or ordered by a regulator. When a recall is initiated, specific batch (es) of a product have to be removed from the supply chain. These products may be destroyed or returned to the company for rectification of defect(s).
Cost of Product Recall
Product recalls are very expensive for a company. It costs a lot of money to recall products from the market. The costs include the administrative costs of identifying product batches that need to be recalled, cost of communication, logistics cost of removing the products from the supply chain, and loss of sales due to bad publicity.
Product recalls may potentially affect the future business of the company. The company faces loss of reputation as consumers lose trust in the company’s products. This may result in drop in sales of entire brand, not just the product in question.
We can look at a famous case of Nestle, where the company had to recall all variants of its highly popular instant noodle brand “Maggi” after being ordered to do so by FSSAI. As mentioned in newspaper reports, this recall was ordered due to excessive level of lead and MSG in the noodles. Nestle recalled more than 27,000 tonnes of noodles from 3.5 million retail outlets, and suffered a loss of Rs. 320 crores.
Organizations do not want to be in a situation where they have to recall their products. However, it is prudent that a company has processes in place if such an exigency arises. Step by step process for product recall is given below:
Steps of Product Recall
There are 5 key steps for a product recall – Issue Identification, Recall Notification, Product Removal and Destruction, Product Replacement, and Feedback Loop.
A company needs to develop Standard Operating Procedures (SOPs) for each of these steps. These SOPs will outline the role of every stakeholder in case of product recall. Following SOPs ensures that product recalls are efficient, targeted, and cost as little as possible. The feedback loop will help ensure that any issues that led to recall are rectified and future recalls are prevented.
FSSAI has laid down product recall guidelines for organisations. They provide an overview of how to develop a recall plan and how to implement it in case of a food product recall.
Organisations have started adapting to these guidelines to develop SOPs and ensure readiness for implementation. The Indian Army wanted to overhaul their food supply chain processes to become recall ready (as per FSSAI guidelines). For this, they subscribe to GS1 India’s DataKart Trace service to implement standards-based traceability solutions and comply with FSSAI guidelines.
Global standard based solutions give the organisations an end-to-end supply chain visibility and enable them to improve the efficiency, besides ensuring targeted and effective product recalls.
DataKart Trace – A Global Standards based Traceability Solutions for Recall
An effective recall needs seamless data flow among supply chain partners with unambiguous and unique identification of products, consignments, locations, parties, and documents.
An efficient traceability solution can help facilitate speedy, transparent, accurate and localized product withdrawals in supply chain when required. They enable a company to know the exact physical location of all the products of a specific batch that needs to be recalled.
GS1 India’s DataKart Trace is a product traceability and recall solution based on global standards. This enable companies to match system and physical inventory by uniquely identifying each unit of product or batch using serialized barcodes and digital link QR codes.
DataKart Trace enables organisations to achieve end-to-end tracking of product from factory to the consumer. As the product moves from one location to another in the supply chain, the barcode is scanned using DataKart Trace mobile app and the data is captured. This improves supply chain visibility. This improves the speed and efficiency of product recall and reduces the costs.
No company wants to be in a position that they have to recall their products from the market. At the same time, they have to be prepared in case such a situation arises. Companies can use global standards based traceability solutions (DataKart Trace) to manage product recall in an efficient, targeted and cost-effective manner.