May 25, 2010

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By Donald R. Kornblet

Wherever your company is in today’s supply chain, you may have product liability issues to be aware of. Companies involved in food, drugs, consumer products, medical devices, autos, marine products, agriculture, and many other fields are finding themselves in the public spotlight on a daily basis. Often, the attention comes in the form of a crisis or a product recall.

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Today’s new focus on product safety stems from a host of causes.

• Federal agencies are under pressure from consumers (and voters) to be more aggressive in protecting consumers.
• Increasing globalization has made American’s aware that other countries may have different safety standards than the U.S.
• Aggressive media and 24-hour cable news channels require constant feeding of the latest crisis.
• And corporate malfeasance has made the public and their legislators wary that companies and those who regulate them will always ‘do the right thing.’ Think Toyota and NHTSA (National Highway Traffic Safety Administration); peanut butter and FDA (Food and Drug Administration); children’s toys and products and the CPSC (Consumer Product Safety Commission).

And a new push for more aggressive regulatory oversight promises that the future will feature more of the same.

There are four things a company in the product safety/supply chain can do to be prepared for what lies ahead.

1. Know where you are in the product safety supply chain. Whether you’re a food processor, product distributor, wholesaler, or retailer, of operate service centers, you’re in the chain. If your ‘hands’ touch a product that is regulated, you’re part of the responsibility chain. It may also mean that you need to understand your exposure to product liability as well. Review with your attorney where you are in the product safety supply chain, and the steps you should take to reduce risk.
2. Have a plan if there’s a recall. Even if you’re not the initiator of the recall, if the recalled product comes through your control, you will need to be part of the effort to retrieve hazardous products. If you’re in the product safety supply chain, chances are you’ve already experienced this. Sometimes you may be asked to provide sales or shipping records. Sometimes you may be asked to notify customers who you sold or distributed the product to. Sometimes you may be asked to sweep all hazardous products being recalled from your shelves and ship them to a central point. Sometimes you may be called upon to accept products under recall from your own customers and their consumers. In any or all of these cases, you should be prepared and have a plan (prepared before the crisis occurs) for how you will quickly and accurately do what has to be done.
3. Training and preparedness. Product recalls are demanding and intense events. They create an immediate demand on your company resources in terms of time and attention. Personnel need to be pulled from other jobs to complete assignments that support the product recall. Daily operations are affected as attention turns to managing the crisis event. Under the stress of time and urgency, disruption and confusion may occur. Make certain you know before hand what personnel you are likely to require for your product recall event, and that they have received some preliminary training. Personnel, who handle their work professionally, can make the difference between success and failure. And in these events, failure can come with a high price tag.
4. Data and documentation. Companies in the supply chain must have good documentation retention and data management. By its nature, product recalls are data intensive, requiring production, inventory, shipping, and sales data as part of a product’s traceability. Companies need to know where products are located once they leave your possession. A new focus on traceability by the government places this subject as one of great sensitivity both nationally and internationally. A new emphasis on testing and certification places additional demands on a company’s documentation management.

Preparing your company for a product safety event is like preparing for any other company program of importance. You need to have a plan. You need have organization and personnel assignments. You need to know what is required in the way of resources and data. And you need to be able to move quickly and effectively during product recalls.

Product safety is a fact of life in today’s global economy. While consumers everywhere have higher expectations that their products will be safe for use, the reality is that things still go wrong or not as intended. Your success as a company in the product safety supply chain, as in every other facet of your business, depends on leadership with a strong sense of purpose.

Donald Kornblet is publisher, ADK Product Safety & Recall Directory and president of ADK Project Resource Group LLC (www.adkprg.com or www.adksafetyinfo.com). He has managed product recalls for nearly 30 years and has a background in public relations, call center management, and business. E-mail your comments or questions to dkornblet@adkprg.com.