When an issue is reported that may require a product recall, the onus is on manufacturers and producers to investigate and respond accordingly. Companies that have never been through the experience before may go into it with assumptions, while those that have one under their belts often become complacent. Either way, there are several expectations that may not meet the reality.
Expectation: We’re unlikely to suffer a recall because of the safety protocols we have in place.
Reality: Companies that have made product safety a top priority are certainly ahead of the game. But what happens when a supplier discovers an issue? As much as companies would like to think they can prevent any threat of a recall, the fact is they still happen. Being overconfident often means being unprepared. And that’s where the biggest pitfalls happen.
Expectation: From the time we report a potential hazard, regulators are going to be unbearable.
Reality: As long as companies approach the issue with public safety as the top priority, regulators will respond in kind. That means being quick to report the issue, conducting a thorough investigation, maintaining an open and honest dialogue about the potential defect or hazard, and having the ability to maintain compliance with recall procedures. In fact, a reportable issue is a good time for companies to position themselves as a partner with regulators – whether a recall becomes necessary or not.
Expectation: Once you’ve experienced one recall, you’ve experienced them all. They’re pretty much the same.
Reality: For most companies, every product or hazard has its own unique complexities. For example, let’s say a pharmaceutical company issues a recall for a pain reliever because it is slightly less potent than listed. A year later, the same company finds a batch of fertility drugs were not as effective as others. Sounds like a similar issue, right? Wrong. In the second case, the company will likely need call center agents with specialized sensitivity training. The same goes for food companies. Imagine how the public would react to an undeclared wheat allergen in frozen fish sticks vs. a dangerous pathogen in baby food.
Expectation: Retailers will carefully pull only the lot codes that are affected.
Reality: While retailers do have processes in place for removing affected products, they may not include examining and separating it from nonaffected product. The result is often “self-sweeping,” in which entire lines and brands are removed. Do you want your competition to be the only product available after a recall? Of course not. That’s why it’s a good idea to utilize a field force that specializes in reverse logistics.
Expectation: Our current call center staffing levels will suffice.
Reality: Typically, only the smallest and least hazardous recalls can get away with using internal call centers. This is especially true as more and more retailers use loyalty programs to reach out to affected customers directly – sometimes by the tens of thousands. Other factors that impact call volumes include the type of product (pet food recalls are by far the worst) and amount of media coverage. Having a recall is bad enough, but leaving loyal customers on hold when they are feeling anxious is a sure way to damage a brand indefinitely.
Expectation: Our regular insurance will cover this
Reality: Having recall coverage included in a policy along with many other potential crises may not be sufficient. Specialized recall insurance can provide reassurance to everyone from the leadership team to employees on the ground level that the company is ready to handle the inevitable.
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