The 1990s film “Total Recall” was billed as one of the most expensive productions of its time. When it comes to product recalls any business that is faced with one may find the same. Product recall can be expensive, logistically challenging and in terms of the company image, potentially fatal. In the modern business world an element of risk is unavoidable and with supply chains often stretching across the globe, ensuring that your final products are safe, legal and fit for purpose can be a challenge. Having strong plans in place to deal with a recall is essential and understanding the risks posed by a potential recall is also crucial.
The Causes of a Product Recall
Recalls can happen for a variety of reasons; they can be voluntary or they can be initiated by the authorities and in both cases usually on the grounds of public safety. Whatever the basis for the recall they can be costly and have significant implications in terms of continuity in the short term. Insurance will often cover those costs, especially where components or ingredients from external suppliers are at fault, but in many cases the initial costs will fall on the company, impacting their ability to continue to function effectively in the short term. Resources need to be available to cover a number of aspects of a recall – the physical recovery of products, management of announcements and funds and capability to deal with customer complaints or legal issues.
The Impact
It’s rare that a recall will have a positive impact in the short term. However, handling the crisis is key to ensuring your company’s recovery. Recalls can, especially for smaller to medium sized firms, be a public relations nightmare and one that can have long term and disastrous implications. A successful recall strategy is, in fact, not dissimilar from strategies you should employ to avoid problems in the first place, and planning and effective management are key parts of the process.
Steps for dealing with Total Recalls
If the worst happens there are a number of important steps to take – apart from the obvious of actually getting the products off the shelf. A robust product recall plan should involve;
- Having clear and easily achievable goals that focus on the safety of your customers and also on continued productivity of your company. In this case customer safety is paramount, while your ability to continue to function as a company should be considered as contributing to this.
- Everyone within your company should be committed to your plan for management of a recall. This starts at the top, with senior level management but the importance of the plan and of its effective implementation should be understood at all levels. Regular training should include sections on crisis management and goals in the event of a recall should form part of new employee inductions.
- Creating formal crisis management plans, including crisis communication plans, is also crucial. Use these to establish clear roles and responsibilities at all levels within your company.
- Plans should be backed up with training sessions and “mock recall” exercises. These can not only help to ensure that plans are robust but also keep them at the forefront of your employee’s minds, ensuring that everyone, at every level, knows what to do when and if the worst happens.
- Training and mock exercises can be the most important investment you’ll make in preparation for a recall. Exercises will help to eliminate potential hitches when it comes to the real thing and they can also help to ensure that you are meeting the current regulations relating to your industry/product. Training provides an opportunity to “audit” your plan in both terms of effectiveness and legality.
Steps to Take
For smaller companies a recall can have the biggest impact; although they often the ability to be more reactive than larger firms the costs and the brand damage effect can be fatal. Two options should be considered for all small to medium firms.
Insurance can ensure that you are protected against accidental contamination or malicious contamination during manufacture, packaging or distribution. It will also, usually, provides protection against government initiated recalls. Working alongside a professional firm specialising in product recall and the management of the process, can also offer the simplest, most cost effective solution for small companies. Many businesses specialise in brand awareness and from a local field marketing company to high profile PR agencies you’ll find that affordable recall management solutions are available. Working with a supplier to create your management and training plans before the worst happens is also advisable. Recovery may not be immediate but managed well it’s certainly possible.
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