Effective Product Recall

Consumer awareness has been heightened because of crisis relating to food, pharmaceuticals, automotive and consumer goods safety over the past 10 years. In 2008, twenty-three consumers died in the Toronto area after consuming tainted deli meats while fifty-three consumers died after eating contaminated food in Germany in 2011.  While brands strive to make, and deliver consistent quality and safe products across all consumer segments, product recall may be necessary as a precautionary/voluntary or mandatory consumer safety measure. Mandatory product safety recalls are generally urgent as the product may already have caused illness, injury or death. However, effective product recall is complex for both businesses and regulators. The regulations governing product safety differ across food, pharma, consumer goods and industrial products while jurisdictions within a single country may vary on how to execute the recall. These recalls are often multi-jurisdictional, multi-national and multi-lingual, adding to the complexities. The lack of cohesiveness between regulation has seen the development of two complimentary industry driven supply chain standards for effective product recall. These standards, ISO10393 (2013) Consumer Product Recall: Guidelines for Suppliers and the GS1 Product Recall in Multiple Jurisdictions Implementation Guideline[1] (2012) lay out key strategies to execute product recall and to mitigate risk. They both call for consistent usage of GS1 product identification and related standards to drive the process.          

Empirical research

The US Centres for Disease Control (USCDC, 2010) indicates the United States has 48 million cases of foodborne disease annually resulting in 150,000 hospitalizations and an estimated 3,000 deaths. A study[2] published in 2013 revealed the societal costs of this foodborne illness in the United States as in the ‘billions of dollars’. The literature notes that product recalls can severely damage brand equity, brand reputation, consumer perception of quality and lead to significant revenue and market share losses as well as bankruptcy. One study[3] noted a pharmaceutical company stock price dropped from $45.07 to $33.00 in one day when a key product was recalled. Furthermore, a hamburger manufacturer went bankrupt after recalling more than 20 million pounds of frozen hamburgers in 2007.

Addressing effective product recall

Businesses must use a combination of tools, industry standards and trained staff to ensure product safety recalls can be executed effectively, mitigating risks to the brand and consumers. Furthermore, brands should engage in mock-recall with key trading partners to test their recall procedures against contractual agreements and regulatory requirements. Staff training should include the fundamentals of traceability and usage of tools to rapidly track goods forward in the supply chain and trace goods backwards to their origins. The usage of the ISO and GS1 standards as well as interoperable systems using the GS1 EPCIS standard facilitates the effectiveness and cohesiveness of the entire process. Tools such as online and mobile applications can help consumers to verify if their products are on recall. For food and pharma, notifications should include the trade item number (GS1’s GTIN), lot, batch or serial number and either expiry/best before/use by date codes. For automotive and consumer goods, the brand, model number or serial number may be available. However, providing images of the unsafe products have proven to be a very effective method of communication as product identification is often discarded after packaging and labelling is removed.

INEXTO solutions enables digital chain-of-custody

INEXTO’s depth of experience enabling digital chain-of-custody solutions helps brands gain much-needed visibility, transparency and trust in their legitimate supply chains. Brands can verify the location and legal custody of in-transit shipments along the entire global supply chain, essentially tracking forward. While the INEXTO tools facilitate a comprehensive tracing (backwards) of the key steps, events and transactions that have occurred from sourcing through production and distribution. The usage of Google Maps ® aid the visual process for tracking and tracing.  

INEXTO: How does it work?

Brands benefit today from INEXTO’s experience in deploying scalable, secure solutions for mass serialization, aggregation, tracking, tracing, recall as well as covert, overt and forensic anti-counterfeit measures and regulatory compliance. For example, the INEXTOR mass serialization module is a highly scalable solution and currently assigns and manages 100+ billion secure unique serialized identifiers annually for clients. The subsequent traceability data is captured as EPCIS supply chain events in the INEXTRACK module which scales to multi-billions of EPCIS events. Furthermore, the traceability data in INEXTRACK can be queried using the INEXTRACE smartphone application which can provide business partners, importers, market surveillance authorities and consumers with the capability to query and verify a product’s traceability, it’s safety and whether on recall. In addition, INEXTRACE facilitates access to relevant company details, validation of product attributes and images, and provides an invaluable tool to authenticate the product.

INEXTO Suite

INEXTO is a proven leader in providing GS1 centric solutions in multi-party supply chains. Today, the INEXTO suite of solutions are implemented in 1000+ manufacturing lines and 1500+ locations worldwide. INEXTO’s proven scalability and thought leadership is helping organizations today to bridge the information asymmetry gap, comply with regulation, improve competitive advantage and enhance transparency and consumer trust.

 

[1] http://www.gs1.org/xml-product-recall/guideline/product-recall-multiple-recall-jurisdictions-implementation-guideline

[2] Mo. Lijia (2013) Impact of food safety information on US poultry demand

[3] Chen et al (2009) Does a Firm’s Product-Recall Strategy Affect Its Financial Value?  An Examination of Strategic Alternatives During Product-Harm Crises.  

 

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