Part two of a two part series:
What Went Wrong? What Should You Do About It?
Once the crisis stage of the recall has passed, it is always prudent to conduct a post-mortem to determine what went wrong, who, if anyone, was at fault and what you should do better in the future to avoid similar defects. Did you fail to test something thoroughly or fail to ask enough questions? Did the manufacturer fail in some way or make a change without telling you? Product safety experts have long advocated that the surest path to product safety is by designing defects out of products to begin with. The more you understand about what went wrong with the defective product the better job you can do with future products. The post-mortem is also the time to consider whether you may be able to recover some or all of your recall related costs. Are you insured for any portion? Do you have any indemnification agreements in place that may be applicable? Should you consider litigation to recover your damages? There are many such questions to ask at this point and you are wise to consider each one.
Product recalls can happen to any company of any size. It doesn’t matter whether you are a supplier or distributor, whether you import directly or retail products that you buy from others. Under the Consumer Products Safety Act, everyone who manufactures, distributes, or sells defective products can be held responsible. No company is immune no matter how expert its engineering or how vigilant its compliance. If you need to be convinced, just type “BMW” or “Mercedes” and “Recall” into a Google search and see how many hits you get. Do the same for the names Disney, McDonald’s, Fisher-Price, Lululemon, Nike, UnderArmour, Kellogg’s, General Mills, Schwinn, Cannondale – almost any respected brand you can think of – and you will discover recalls. And so it could be with you. But if you take steps in advance to prepare—even small steps—you can greatly diminish the pain and anguish a recall could cause your organization and you can reduce your costs significantly. Keep in mind the two most important takeaways from this brief overview – prepare and practice – and they could make all the difference.
Recall Readiness Checklist
- Plan For It. Assume it will happen sooner or later. Learn the recall process, step by step, and teach it to your key managers. Go through CPSC’s Recall Handbook carefully and periodically review it with your management team.
- Learn What The CPSC Requires. Learn or review the Section 15(b) reporting requirements of the Consumer Products Safety Act. Among other things, these well-establish consumer product safety rules require you to report to CPSC immediately whenever you learn of a substantial product hazard or a product that doesn’t meet a CPSC standard. Late reporting can generate seven figure civil penalties. While you’re at it, also learn about the Section 37 and Section 102 reports. It’s all in CPSC’s Recall Handbook.
- Centralize Incident Reporting. To ensure you are aware of all incidents that could require a Section 15(b) report to CPSC, be sure to centralize the review of all customer complaints, product returns, defects, accidents, incidents and other leading indicators that may indicate a quality problem or a safety hazard.
- Get The Product Back. Whenever you receive a product-related complaint, claim or injury report, always ask for the product in question to be returned to you. If the product is later deemed to be defective such that it leads to a recall, any batch, lot or tracking numbers on the product may help you limit the scope of the recall.
- Distributor: You Report If Supplier Doesn’t. What if you purchased the tumbler in this example through an industry supplier rather than importing it directly? How would the scenario change? When reporting the complaint and injury to the supplier you could request that the supplier immediately file the Section 15(b) report with CPSC. If the supplier refuses or delays, you can file the Section 15(b) report as a “retailer or distributor report” and request that CPSC contact your supplier directly for more information. Remember that under the Consumer Products Safety Act, everyone who manufactures, distributes, or sells defective products can be held responsible.
- Notification Tools. Study the material on CPSC’s website as examples of the posters, scripts, FAQs, social medial plans and other processes you’ll have to go through in a recall.
- Get Documents In Order. Review your systems for documenting and storing key product information you would need in a recall. Be sure it is easily accessible.
- Appoint Recall Coordinator. Assign a manager to act as your recall coordinator. Provide continuous training and stay abreast of best practices.
- Line Up Outsider Experts. Interview expert product safety lawyers about the role a lawyer would play in a real recall. Establish a relationship in advance so you could move quickly in an actual recall. Interview firms that provide recall management or consulting services to be aware of what’s available. Speak to your insurance company about recall insurance. Cover all the bases and decide what’s best for you based on your budget and risk tolerance.
- Start At Product Development. Review your product development and selection process to be sure you’re being as careful as you should in evaluating, testing and overseeing the production of the products you make or sell. Perform a risk assessment for each product and consider what could go wrong. Where applicable, enlist a third party lab to perform product integrity tests as well as use and abuse tests.
- Put ID Marks On Your Products. Mark your products whenever possible with lot, batch or tracking numbers that you can tie back to the production run. If only a portion of your products have the defect these numbers may help you limit the scope of a future recall.
- Use Mock Recalls For Training. Periodically test your systems and management training by conducting a mock recall.
Rick Brenner, Prime Line President,
www.Primeline.com. Primeline is a Universal Unilink Preferred Supplier. For product information contact John Stoltenhoff (firstname.lastname@example.org).