What every equipment manufacturer needs to know about surviving a product recall
By Peter Gillett
In 2016, the U.S. FDA approved more than two dozen medical devices, and recalled nearly 40. The reality is that market recalls are inevitable, as not all products will meet consumer, regulatory, or legislative standards. Even companies with the best safety records can find themselves in a recall situation.
When handled well—with the right messages—recalls can improve a brand or company image. On the other hand, if a recall is handled badly, the damage can be fatal. The level of preparedness by a manufacturer going through a crisis can make or break its ongoing success and vitality. Fortunately, reacting quickly and being proactive with messaging is possible. It just takes adequate preparation.
Fail to Prepare—Prepare to Fail
Being prepared for a recall is the best safety net for your stakeholders. Still, product recall processes are a broard matter. They should be incorporated into your company’s operational strategy—and updated and practiced frequently. New employees should be trained in them, while employees who leave should be debriefed about risks.
From new manufacturing processes to trusted suppliers, every aspect of a company must be audited for risks. Recall processes should be checked for applicability to all situations and communicated to all individuals involved.
Know What—And Who—You’re Dealing With
Ask a lot of questions while you still have the opportunity. Make sure you know the major players within your company, as well as key members of your outside counsel, such as lawyers and insurance brokers. Open communication between those experts, internal decision makers, and internal and external communications specialists is important so that when a crisis strikes, positive relationships and a healthy flow of information are already established.
So know who handles new legislations and regulations. Be aware of your product recall insurance. Has it been updated, renewed, or amended? Your broker should keep in touch with you on this matter and understand your changing needs. And make sure that your legal counsel has also reviewed the terms of your insurance policy. After all, it’s imperative that you have trusted counsel who will ensure that your company adheres to government and consumer laws, rules, and regulations in the event of a lawsuit.
You should also know which recall class you’re facing—with classes varying based on problem severity and protocols followed. Another important aspect to understand: the impact of the recall. Not only can a recall affect revenue, it can also impact the company’s cash flow, profits, and stock value.
In other words, the more you know, the better.
Five Strategies for Success
Just as schools conduct fire drills and hospitals conduct disaster preparedness drills, companies have a way to prepare for the worst. Here are five of them:
1. Conduct a mock recall. Practice, practice, practice. Mock recalls are a fundamental part of the process for ensuring a smooth product recall. They need to be frequent (every three-six months), with all members of the task force knowing their role in the recall implicitly. Follow this four-pronged approach when performing a mock recall:
- Choose a product for the mock recall.
- Trace the product from the source to the finished product.
- Verify all communication systems—emails, addresses, telephone numbers.
- Document each mock recall and modify the strategy to correct any aspects that were overlooked.
2. Appoint a task force. Note: An internal task force manages every recall. Employees come and go all the time, so make sure the team meets regularly to review new legislations in your sector and practice mock recalls frequently. To ease the communication process, set up a dedicated phone line for the team .
3. Plan your message(s) to the media.Don’t write a press release at the 11th hour, when you’re in the midst of a crisis. Your communications to the media and consumers has to be well-thought-out and approved by legal. Have a number of templates for different scenarios ready, which allow you to issue the right press release at the right time.
4. Establish confidentiality with key stakeholders. Identify who you can trust with sensitive information. Like I mentioned above, recalls are expensive—and you don’t need the added stress of an attack against your brand. Know your partners and suppliers, and involve them in your mock recalls so they follow your company’s protocols.
5. Appoint your recall partner ahead of a recall. Close the gate after the horse has bolted. When you’re up against a crisis, you don’t have the luxury to get to know your recall partner. But how they operate will be a huge factor in the success of your recall. Meet them when you’re not in crisis mode.
Understand how they reach out to consumers and what security measures they have in place. When a crisis hits, you will want them to jump into action at the touch of a button.
Developing a Recall Plan
The above list lays the foundation for a comprehensive and thorough recall plan. The action plan should clearly outline all strategies and messaging.
Here are four more detailed tips:
1. Establish who does what, define terms, and assign roles and responsibilities. You don’t want too many cooks in the kitchen or someone who is unclear about his or her role. Next, develop a recall flowchart. Work with your recall team to plan the management of complaints, responses, recompense, and logistics. This will be key in keeping everything moving smoothly.
Be sure to announce the roles and responsibilities of the recall team. After all, managers from across the company will be involved in the recall team—ranging from operations, production, purchasing, customer service, to marketing and finance personnel. Everyone needs to be clear on the level of involvement from all departments.
2. Learn how to judge their severity of the complaints. When complaints start to come in, gauge how serious they are. Then, respond to the comments and seek advice from your federal agency.
3. Prepare a variety of messages, get them all pre-approved for each recall class, and divide them according to customer, stakeholders, and media. Have templates on hand with a choice of messages, which can easily be modified in a crisis situation.
4. Identify the product locations. It’s the manufacturer’s responsibility to know the quantities of products in production and distribution, as well as which consumers have them and where they’re situated. Once you determine that information, you’ll be able to notify all affected parties. During a recall, it’s important to follow the appropriate regulatory agencies and procedures in a timely manner—typically, in this order: agency, distribution chain, and ultimately consumer.
When it’s time to commence the recall, the recall process should follow these stages:
- Remove: Make all efforts to remove the product from the marketplace.
- Control: Ensure the recalled products do not re-enter commerce.
- Dispose: Follow agency-based or other protocols related to the disposal of the item.
- Measure recall effectiveness: Determine if all the appropriate actions have been taken—and if all parties have been notified—and identify whether consumer feedback has been neutral, negative, or positive.
- Recall termination: Only once all regulatory parties have authorized it.
Summing It Up
With ever-increasing consumer protection legislation, being prepared for a product recall should be part of your company’s strategy and communicated to all stakeholders. Your aim is to protect consumers from harm and to protect your brand, while limiting the financial damage of a recall.
And don’t wait until the highly stressful and critical situation of a recall to appoint a recall partner. This company will be your voice—contacting your customers with bad news and offering solutions to abate the problem. Your recall partner must be familiar with your contact strategy and work closely with you to make a negative situation as painless as possible.
Peter Gillett is managing director of Marketpoint Recall, an international recall agency with locations around the globe. For more information, contact chief editor Keri Forsythe-Stephens at [email protected]om.