Piecing The Recall Puzzle Together

Faced with a recall? The key to success is to be prepared. Food Logistics spoke to Ashley Kerman, director recall product management for Winston-Salem, NC-based Inmar Inc., to find out the basics of putting together a recall program.

When putting a recall program in place, where should a company start?

The best first step in planning for a recall is to develop a recall protocol. Most companies assume they will never have a recall. Recall protocol and mock recalls are types of contingency planning. Multiple people within the organization need to be included in the planning—anyone that is part of the supply chain. This includes logistics, marketing, sales, finance, legal, IT, regulatory, legal, accounting, shipping, customer service, call center, warehouse operations, executive, PR, brand management and quality.

Each area plays an important role whenever there is a scenario that requires that you execute your plan. A recall protocol needs to include who does what when in each of the functional areas. It is also important to think through various scenarios and include this in your plan. From a recall standpoint, some of the elements include:

• Communication timing and method—Internal, external, call center, website;
• Notification methods to customers—E mail, fax, letter, business reply cards, press release;
• Product retrieval (pick-up or ship to location);
• Product storage location (third party or distribution center location);
• Processing procedures (scanning of items and at what level such as lot code);
• Crediting or payment procedures (based on customer paperwork or actual processed items);
• Disposition and storage;
• Reporting to executive management and any government agencies.

When these decisions are made, a discussion needs to be held with those that would be responsible. Their input is needed to determine if they can handle the additional volume, if the systems can handle the level of detail that is needed, etc. This is especially true with recalls since it is a return with special requirements that does not fit the forward distribution world.

At a minimum, a contingency plan for recalls should be reviewed annually with all the parties involved. People change positions so those that initially understood all the details may no longer be part of the team. New members need to be up to date. In addition, a mock recall is a great way to test your process to see if it works according to plan. Associates within the company become active participants in the event.

The mock event then allows the company to make the necessary refinements to the plan before the crisis happens. It is also helpful to have a third party company that specializes in recalls work with a company on a plan or protocol. Their experience in working with various companies can provide an insight and best practices approach to the plan.

Does company size matter? Can a company be small enough that it doesn’t need a program?

A recall can happen to any company, regardless of its size. Any company impacted by a recall will be required to follow the same procedures regardless of its size. The basics are notification, retrieval, operational processing, financial settlement, disposition and government reporting. As it should be, the company focus is to ensure consumer safety and protect brand image. Smaller companies may have even more limited resources and therefore need to rely on outside assistance to manage the recall, especially the operational back-end components.

Why should a company work with a 3PL such as Inmar to handle reverse logistics? What benefits does it offer?

Recalls are handled through the reverse supply chain. Manufacturer’s forward distribution networks are designed for effectively processing full-case, first quality goods. Most manufacturers don’t have the systems, the experience or the facilities to deal with the individual items/ eaches that are returned with a recall.

For those that choose to manage a recall in their forward distribution facilities, the process can create chaos and lost productivity for forward distribution. Not to mention that many times the recalled product requires special storage such as a quarantined area to meet regulatory requirements. The systems to collect and account for the returned products should be automated and provide daily updates to meet not only the credit needs but also the reporting requirements for the government agencies.

Given the extreme cost of executing recall events poorly, having an expert partner on board to ensure efficient, cost-effective execution is like a good insurance policy.

Another supply chain challenge is the urgency of the recall. Given the time sensitive nature of recalls, retrieving product back from your customers completely and timely is critical. One way is to coordinate and manage the transportation through the use of returns kits. However, one risk is that more product than just the recalled product will be returned. Another alternative is to utilize a field team to retrieve the recalled product and then ship to a designated location.

Many retailers and wholesalers prefer to handle their product through their existing reclamation process. If recalled product flows through the reclamation process, Inmar already has this product accumulated on behalf of our retailer/wholesaler customers in one of our 33 facilities. Recalls also occur infrequently so dealing with a 3PL such as Inmar assures that changing regulatory requirements are met and resources familiar with recall procedures are dedicated to handling all aspects of the recall.