Managing the Product Recall Process

The large number of recalled products, the low proportion of recalled products returned for repair or replacement, and the high costs (lawsuits, communication, product repair and/or replacement, government agency fines and lost sales, etc.) associated with product recalls indicate the need for firms to properly plan for the inevitable product recall. Factors that account for the high number of product recalls include heavily concentrated supply chains, use of global supply chains, and improved technologies in identifying unsafe food products. This article develops a six-part strategy for planning and implementing a product recall. These stages are (1) organizing for the inevitable product recall, (2) reducing the discovery-to-recall time interval (3) planning an appropriate overall recall response strategy, (4) measuring product recall effectiveness via the completion rate, (5) improving product recall responsiveness, and (6) recapturing recall-related expenses via insurance and supplier hold-harmless agreements