Managing Product Recalls Washington DC

Every few days, it seems, the news provides lessons in the how's and how-not-to's of product recalls.

Proper growing, harvesting and manufacturing controls are key to preventing recalls. But inevitably situations will occur.

Once tainted product has been found in the marketplace—or preferably, still in the supply chain—what steps need to be taken and how quickly can your organization and your supply chain partners be mobilized to identify, secure and remove it?

Real-time product data that captures every move from top to bottom in the supply chain, at the most granular level possible, provides the best resource for dealing with a tainted product situation, says Warren Sumner, vice president, marketing and products for Clear Orbit, Austin, Tx..

"Because you're taking snapshots in time of all your various materials, at each step of their journey through the supply chain, you have an automatic audit record of what went into each product, where it came from, and when and where it traveled. If something problematic makes its way to the customer and there is a recall, you can backtrack very quickly through those electronic audit records and determine where the problem occurred, as well as where all the affected product is now."

Tom Kozenski vice president of product development for Red Prairie, based in Milwaukee notes that recall capabilities boil down to identification and notification.

"First, companies need the ability to trace inventory and the components that make up inventory from the point where the product's made to the point where it's sold or served to a consumer. In our inventory database there's an inventory genealogy that allows customers to trace these steps.

"The second part is notification. If and when they do get that recall notice, companies need to be able to get quickly to a database where they can find out who received the product and notify those people so they can get that product back.

"There are some nice ways to automate that notification, so that within minutes you can be notifying your customers electronically of the problem that exists."

"Another helpful feature for retailers is the ability to automatically notify their POS systems at the stores, by sending them an instruction that the SKU is no longer a valid item, which will prevent their being able to scan it," Kosenski comments.

How such a message may be transmitted is partially a function of the POS system. Some POS systems are smarter than others, he points out.

"One system might be able to turn off the item with a code that identifies the SKU to the checker as a quality issue." Otherwise cashiers would have to be trained not to override an item that didn't scan until they'd checked into the reason.

Automating The Data

Whether you can extend your recall chain out to the cashier in the store, there is much to be gained by automating as much data collection about items at the most granular level possible for as far as you can.

"There's a gigantic difference in how quickly you can respond to a product recall when you have this repository of item movement data readily accessible. With hand-written records, it's probably a matter of hours and even days to isolate a particular source of supply. With these tools it's literally minutes," says Sumner of Clear Orbit.

Increasingly, systems are also including built-in reverse logistics processes for actually collecting and receiving recalled or returned product from customers.

"Once we send out recall notifications," explains Kozenski, "we can post those notifications into our return system and even provide shipping labels for customers. Then we can confirm at the dock we've received all lot quantities back and manage their destruction, or the product's return to the upstream supplier."

In Europe, notes Neil Thall, CEO, Aldata Solution Inc., Atlanta, companies have been forced to develop capabilities to trace the source of product from the consumer back to the grower or farm that raised the animals and to maintain a continuous record of every place the product traveled and everything that happened to it along the way.

"Even for retailers, it's more complex than you might think, when you consider the deli operation, which may slice and repackage product, or prepare meals from raw ingredients that come from several different departments.

"We provide master data management, which provides the platform for tracking and tracing all that information, so it can be available immediately," Thall notes.

Not only can this granular, real-time data help companies to quickly pull recalled product off shelves.

Thall believes within the next few years retailers may use data tracked through customer loyalty cards to automatically notify every consumer who bought recalled product, alerting them to return it to the store or destroy it.

"It's by no means difficult to justify the cost of software and hardware to provide this level of tracking, because there are financial as well as liability considerations that argue for building as much track and trace capability as possible into your item management system."

"We look at product, vendor and location relationships very precisely for a variety of reasons, not least of which is traceability, but also for cost, so we can track the costs that accrue to product as it goes all through the supply chain. If there's product loss that's over the norm, for example, from the time lettuce is received until it's finally displayed for the consumer, we can track that problem back to handling in the warehouse, or receipt, or the specific supplier or transportation company. Just as we can track and locate problem product if it needs to be pulled off the shelves."

Rob Wiersma of Lawson Software, St. Paul, MN, points to other track and trace capabilities a company should have.

"Whatever system is used needs to be web-enabled and collaborative in nature. It needs to span multiple systems and operations.

"If you're a processor, even within your own four walls you probably have more than one system flowing this sort of data," he points out. "You also need to be able to extend this visibility and communication to your suppliers, customers and transportation providers as well."

Like Thall of Aldata, Wiersma stresses the need, too, for a strong master item data management system underlying whatever other capabilities you have, since the ability to speed information through the supply chain is not much help if the data itself is outdated or inaccurate.

Shveta Arora, senior engagement manager with the retail and CPG unit at Infosys, notes that widespread adoption of a standardized product identification system, like GTIN, is also fundamental to extending visibility and traceability across supply chain partners.

"Before you can communicate anything, you need a shared language between partners," she points out.

Benefits Beyond Safety

While adoption of GTIN is rapidly spreading among large food and CPG manufacturers and their close supply chain partners, one place that lags significantly is still fresh food. And this is where, ironically, better track and traceability of recalled products could arguably have the biggest safety impact.

Many of the processes that apply to automatic data capture of packaged product can be adapted to fresh produce, meat carcasses, seafood and other fresh, raw product making its way through the retail supply chain. Whether or not recalls occur, Vicki Griffith of Lawson points out that having the kind of traceability to deal with product purity and safety risks can provide many other benefits as well.

"We have one customer who's taken these ideas about managing information on all the inputs to its product, to take advantage of a special labeling product in France, Label Rouge. It's a voluntary standard with more restrictions than the appellation organic or natural and products with it earn quite a price premium. To get it, you have to be able to prove that the product is handled in a particular way, with certain kinds of attention paid to the health, care and welfare of the product all through its lifecycle.

"This customer, an aquaculture enterprise, has taken the same structure and processes it would use in a recall and applied them to net sales and marketing benefits," she comments.

"The customer has reported that by tracking their product movement at such a fine level of detail, they've been able to use the data captured to analyze the different feed given to different fish, the different additives, water temperatures in the ponds, etc., and been able to compare this against the yields from the animals coming to market, in terms of size, weight and fat content. By being able to track where each fish came from, down to the pen where it was grown, for track and trace capability, they've also gained valuable data from a product quality perspective," Griffith points out.

Another application for such capabilities is in external audits, she adds.

"These may be government inspections, or by a customer. We have a customer in Europe, for example, who is regularly audited by several of its customers. It is now able to make the information available through the same technology it uses for reporting. Whereas before a customer might come in person and spend several days in a room while associates gathered boxes of material, today our client has simply opened up its systems to the people doing the audits.

A supplier can open up the applicable systems to a portal on the web and tell customers who audit them for food safety, 'just log in and look at anything you want to, day or night.'"

Even for recall traceability, and other tracking needs, Suresh Bharadwaj of Infosys adds, vendor portals seem to be shaping up as the best solution for exchanging information on product movement between most wholesale or retail distributors and their suppliers.

"In many cases, the big CPG companies are ahead of the game, having already implemented EDI with their large trading partners, or other forms of automated communications. But customers downstream are dealing with hundreds or thousands of additional vendors, sourcing product as far away as China. It becomes imperative for companies to have that level of visibility into every shipment from as early as the time the PO is created until it's received at the warehouse,"

Many companies are finding that portals where smaller partners can come to post information, or retrieve information, can handle this burden, he reports.