Mitigating Product Recall Risks in Manufacturing

Product recalls are not something any company wants to think about or plan for, but it is nearly always something a manufacturing business will need to face at some point. Recalls are costly, time-consuming, and damage a company’s reputation even when there is no warning sign or opportunity to avoid the near-disaster.

Recalls can happen to any company, but manufacturers can take several steps to mitigate some of that risk and achieve a better outcome.Download-our-ebook-bombproofing-your-business-cta

Have a Strong Quality Control System in Place

A quality control system is a core component of your manufacturing business. You may believe you already have such a system, but how accurate is it? Is it operating the way it should, or are there steps being cut?

A strong quality control system should include having clear and consistent quality standards and procedures for inspecting and testing products at all stages of the manufacturing process. This is the key way to mitigate risk – by spotting a problem early in the process to prevent it from going further and costing more.

Use High-Quality Materials and Components

In the last few years, many manufacturers have had to cut costs and source materials from lesser-known and often inferior providers due to product and material shortages. Luckily, many of those problems have been alleviated. That means it is time to take a much closer look at what you are using.

By using high-quality materials and components, it is possible to reduce the risk of defects in your products. There is also less unknown. You know the composition of the materials, the structural integrity of those materials, and their overall design. This allows you to trust that what you are creating is effective.

Have a Well-Trained Workforce

This is another difficult step for many companies as their manufacturing workforce has aged and is quickly approaching retirement. The “next generation” is far less experienced, putting companies at risk of failure and mistakes.

However, developing training programs that provide clear skill training from the ground up protects your business. Your employees must be adequately trained to manufacture products safely and correctly. However, they also need to understand why. Teach them what to do and why their task is important. You want to develop a workforce that is passionate about quality workmanship.


Have a Robust Product Recall Plan in Place

Without a doubt, even in the most well-established program, there will be instances of failure that occur. Your manufacturing business must have a robust, comprehensive recall plan to manage this. Developing a recall plan should include the following strategies:

  • Put in place the right people, including a recall coordinator who will form a committee and then document the entire process.
  • Document and record the products at every stage of their lifecycle. This will include using serialization or marketing the product. Be sure it is marked either individually or by the batch.
  • Develop a compliant management program to standardize the concerns and to capture valuable information that could help you and your customers to detect the problem early, minimizing any risks.
  • Monitoring all customer complaints and warranty claims. Be sure that there are effective testing and inspection records on hand. Be sure that your product liability documentation is in place.

Create a plan that:

  • Identifies the problem as early on in the lifecycle as possible.
  • Notifies all of those necessary and impacted, including customers who may be at risk.
  • Recall defective products proactively. Not doing so fast enough could lead to larger financial losses later.

Be Proactive in Communicating With Customers

It often seems like the last thing you want to do is to communicate with customers about a product failure or mistake. Yet, being proactive rather than reactive can help to protect your business in the long term. Most people are less likely to be concerned with a company that comes forward to share a potential product failure than they are to react to a situation where it seems like the company is hiding some information.

If a product recall is necessary for your company, do not wait to communicate with customers quickly and honestly. Doing so helps them to remain safe and reduces the potential losses your business may incur.

Consider Some Additional Tips

Keep the following in mind while you work to mitigate product recall risks in manufacturing:

  • Conduct regular risk assessments. This is one of the best ways to identify potential hazards early on. It gives you the time and ability to take steps now to mitigate problems quickly.
  • Use a risk management tool. Technology is exceptional today and a tool you have to have. Several software programs are available that fit the product type you have that can help manage product recall risks.
  • Get insurance coverage. Ensure you have product recall insurance covering the costs of such an event. This should include the cost of repairing or replacing the defective products, the cost of notifying your customers, and all associated legal fees.

Following these tips can help your organization mitigate risk and streamline many obstacles you face when recalls occur. As a manufacturing company, this allows you to protect your business from the financial and reputational damage that product recalls cause.Subscribe-to-the-Arnold-Insurance-blog

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