Dealing With A Massive Recall
The largest recalL of food products in U.S. history is motivating the industry to think proactively. As those in the recall industry remind us, recalls are high-risk, low-probability events. But when a recall happens, a whole set of cascading events immediately goes into action. Are you prepared?
Inmar CLS Reverse Logistics processed over 1 million items involved in the PCA peanut butter product recall since mid-January through February, notes Ashley Kerman, director of recall client services for Inmar CLS Reverse Logistics headquartered in Winston-Salem, NC.
“We offer our clients a service to prepare for recall management, as preparation is the biggest part of a recall and helps make the overwhelming process flow a lot more smoothly,” says Rodney Bias, vice president of regulatory compliance.
According to a keynote address giving at the Food Safety and Security Summit in March 2008, companies with a crisis and recovery plan in place show a 10-percent increase in shareholder value one year after the event.
Recalls happen in a few ways, explains Kerman. Manufacturers, suppliers, retailers or wholesalers can initiate the recall. “Because this recall was so huge, we were receiving (and continue to receive) notifications directly from the FDA on a daily basis. They told us to hold all this product until they were sure we would be destroying it in a regulatory-compliant manner,” she says.
Some state regulatory agencies notified Inmar facilities of the recall and outlined handling procedures.
“With a recall of this size, our facilities will get numerous federal and state inspections to ensure we are handling the product properly,” explains Bias.
Once notification is complete, a chain of recovery and disposal events goes into motion including product retrieval, transportation, processing, reimbursement, disposition and reporting. “The costs will include product costs, destruction costs, handling and transportation, and lost production costs,” reports Kerman. “Manufacturers lose their production costs and they have to pay for the recalls because they must reimburse all the retailers involved.”
Inmar helps manufacturers develop protocols and the organizing teams that would be involved in a recall event. It operates about 40 reclamation centers nationwide.
“When a recall of this magnitude happens, most manufacturers are not equipped to bring individual items back into their supply chains,” explains Kerman. “So this network of ours helps facilitate getting product out of the stores to a centralized place for processing, counting, record keeping, and final destruction. We offer witness incineration or witness landfill dispositions for manufacturers.”
Retailers will want to scan the recalled products and get them out of their stores and back to the manufacturer as soon as possible, continues Kerman. When products arrive at the reclamation centers, they are scanned so retailers get credit and manufacturers are billed back.
Inmar encourages everyone in the food supply chain to follow its list of best practices. “Preparation is a good investment, because a recall can be a very painful and costly process,” says Bias. —A.T.