July 22, 2009

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By Mike Rozembajgier

Executing a recall is truly a balancing act. Companies face many challenges during a recall, not the least of which is protecting the company’s brand and reputation. Not only is a quick and effective recall critical to consumer safety and brand protection, it is also essential to putting your company in a position to mitigate the legal and economic risks accompanying a potentially devastating recall.

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From a recall perspective, companies are continually facing changing regulatory requirements and increased scrutiny. Overall, recalls are on the rise, and yet there is limited knowledge and awareness about the true impact that a recall of any size can have on companies. Recalls come in all shapes, sizes and flavors. But regardless of circumstances, there are several major mistakes that companies make during the recall process.  

Being aware of these critical stumbling blocks can put you one step ahead on your road to recall recovery: 

Mistake 1: The Lack of Pre-Planning – Recalls are a genuine business peril. Just because you have never had a recall doesn’t mean you shouldn’t be ready with a plan. The company that is not prepared for a recall, even if they’ve never experienced one, is the company most likely to be damaged. But just a written plan may not be enough. Conducting a mock recall takes planning one step further, helping companies understand in advance the time commitment that recalls require. Experiencing a mock recall first hand often helps companies weigh the cost/benefit of outsourcing some or all of the recall process. Effective recall management takes an unparalleled amount of time and attention from your employees, and can essentially prohibit them from fulfilling their daily job requirements. All the more reason to have a plan in place and employees trained in role during a product recall.

Mistake 2: A Poor Recall Strategy – Once the decision has been made to execute a recall, the regulatory agency requires you to present your recall strategy. This strategy should outline the company’s plan for action and must be approved prior to conducting the recall. You will then work with the regulatory agency to determine a timeline for executing the plan. Critical elements include clear and timely communication and the means by which customers will be remedied. Regulatory agencies not only require a recall strategy in advance, but they will also conduct a post-recall audit. Some companies have been required to execute a second press release because the first notification did not generate enough response to satisfy regulatory compliance.

Mistake 3: The Wrong Remedy – First and foremost you need to understand your audience. But it’s not just who they are, it’s about what they do, how they receive their information, their level of understanding and their likelihood to respond. An effective remedy is timely, well planned and documented while also taking the above factors into consideration. Remember: it’s not just about what the remedy is, but how the message is delivered that helps ensure response. Failing to effectively communicate with your audience will result in decreased response rate and a prolonged recall – costing the company more money and potentially damaging the brand. 

Mistake 4: Mishandled Products – Throughout the recall process, a company may be required by the regulatory agency to conduct effectiveness checks and ensure that all affected products are off the shelves and out of stores. Recent legislation increases financial and criminal penalties for both manufacturers and retailers when affected product is found on shelves, making it critical to quickly conduct and thoroughly document effectiveness checks. When a company recalls a product, it is understood that the goods will be returned, replaced, repaired or destroyed. But what is not always realized is the importance of documenting the remedy and resolution and ultimately disposing of the products safely and compliantly. Depending upon the size and severity of the recall, the company potentially faces storage and disposal challenges.

Mistake 5: Failure to Properly Manage Data – The regulatory agency has the right to request updates on the status of a recall at any time throughout the process. These updates may require a report of all IVR/800# and Web responses, returned products and issued product replacements. In a substantial recall, these reports may take hours to generate if the data is not effectively managed. However, in addition to meeting the standards of the regulatory agency, this information is critical to mitigating the risks of penalties and litigation that inherently goes along with recalls.

Even if you understand and plan for recalls, there is no way to ever be fully prepared. Regulations and circumstances change. But that does not lessen the importance of planning. What is important is that you are ready with a team in place that can be called at a moment’s notice to prepare a strategy, communicate with regulators and execute your recall effectively. Ideally your team will know what questions to ask and understands the resources available to assist every step of the way. 

In closing, a few words of advice. First, be ready before a recall happens. Then, when you are in the midst of a recall, put yourself in the shoes of the end consumers, regulators and your employees. This recall is about them. Their response and ultimate safety is critical to your success. 

Mike Rozembajgier is Director of Recalls with Stericycle’s ExpertRECALL service. Mr. Rozembajgier has Consumer Recall Process and Planning expertise and has executed effective recalls for consumer, pharmaceutical and medical device companies. Contact him at (317) 275-7585, mrozembajgier@stericycle.com.