Preparing for Product Recall beyond Standard Reverse Logistics

Where product recall sits in relation to your overall business continuity planning will depend on the gravity of the recall. At one end of the scale, reverse logistics is simply part of distribution and shipping: when someone somewhere receives a defective or unwanted product, the supply chain has to be able to handle the flow back for repair and resale. However, a problem that systematically affects a whole batch of products is another matter. In this case logistics management needs to be supplemented by the appropriate crisis management.

The reasons that lie behind many product recalls are the minimisation of the danger of injury, the need to comply with legal requirements, and the protection of a brand reputation and other company assets. Enterprises in any sector may be affected differently from one year to the next; in 2012, car manufacturers globally were hit with a number of product defects that led them to recall different series of vehicles for repair. In food and pharmaceuticals, the problem often becomes one of traceability too – finding out who bought the problem product and who therefore is at risk.

Customers increasingly want to know what their suppliers are doing to ensure crisis management effectiveness or incident business continuity (a.k.a disaster recovery). While making a plan is a good start, testing it is also necessary – a periodic simulation of a product recall is necessary in a number of industry sectors. While integrating this requirement into overall business continuity planning, enterprises also need to be aware of the different between simulating recalls and simply confirming traceability. The real recall test includes not only traceability, but also escalation procedures, crisis management, recall logistics and communication to all groups involved downstream and possibly upstream in the supply chain.