No company ever wants to face a product recall.
Such situations can result in the loss of hundred, if not thousands of customers. Yet, when companies prepare well ahead of time for such incidents and manage the recall properly, they can actually gain credibility and restore customer confidence.
The keys are in proper planning, clear communication, technology and logistics. Being recall-ready is the soundest approach, even if the protocols are never used.
Recall management 101
A sound recall strategy needs to focus on all corporate components, considering the impact of a recall on all areas of an operation. The strategy also needs to consider all time elements from the discovery of the issue, the actual recall, to the consequences and follow-up tasks needed.
Management needs to instill in employees an understanding of the correlation among recalls, consumer satisfaction and safety, and the importance an effective recall can have on long-term corporate success. There also needs to be an open culture that allows employees to feel safe and empowered when identifying potential problems.
Once it becomes clear that a recall is necessary, there are a number of questions to be considered. What is the scale of the recall – full recall, selective recall, retrofit or repair offer, or optional recall? Is an exchange necessary or does a consumer advisory suffice? If a government agency has demanded the recall, are the charges valid or should they be challenged?
Communications and stakeholders
Before and during a recall, communication is crucial, both internally and externally. The company must determine who, other than customers, are the key stakeholders, such as suppliers, retailers, distributors, employees, regulatory agencies, shareholders and financial institutions. All parties with a vested interest in the recall need to be communicated with clearly, often, and consistently. Recall scenarios should be a part of any company’s crisis communications policy.
Communication needs to be transparent about the reasons for the recall, the causes, and the mitigation being done, not just in the recall itself, but also in a company’s internal management, policies, and procedures. Communication needs to assure all stakeholders that the solution presented will resolve the issue. Finally, communication should be designed to begin the process of repairing and restoring corporate reputation.
Technology and logistics
Operations, particularly logistics, inventory control, and customer service, need to be ready for the increased volume of work a recall may create. Ensuring that these systems are integrated and have the proper capabilities is essential to making a recall run smoothly.
These systems have to track reporting of possible defects, customer information, sales, supply chain, and finances. Tracing product information throughout a recall effort is a crucial step to ensure an efficient recall process.
Understanding the inter-relationship of systems is critical. When software solutions do not talk to other software solutions, it creates inefficiencies throughout the organization, flaws that can become exacerbated in a recall situation.
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