Regardless of how committed you are to quality control and safe practices, product recalls do happen. Especially considering how many channel partners are involved in getting a product into consumers’ hands – there are many places where something can go wrong.
Navigating a product recall can strain customer relationships, negatively impact sales, put pressure on your channel partners, and erode brand value. The impact of a poorly executed recall can be damaging for years to come.
Lessons Learned: Asset Data is Critical During a Recall
Recently, a large, global vendor had to execute a recall in response to a piece of hardware that was spontaneously combusting and causing fires. The vendor was faced with a significant challenge: they did not know where all of the products were located. As a result, the vendor could not conduct a thorough or discrete recall. They were instead forced to communicate the recall using mass advertising and direct mail, which were costly and resulted in significant damage to their brand.
To minimize potential damages, it’s important for vendors to be prepared with a plan of action and the necessary systems to address any potential recall.
Create a Recall Plan
A full-blown global recall is often complicated and can invite negative press as well as legal implications. An effective recall plan will help vendors and their channel partners get flawed or unsafe products off the shelves and out of the customers’ hands quickly with as little brand impact as possible.
A primary key to this process is to have the data necessary to quickly identify and contact your affected customers. If the company in the above example had been using an appropriate platform, they would have had immediate access to accurate customer data including:
- Physical Location: Where the specific hardware models are located (their physical address), right down to the building level or department. This data can be presented in Google Maps with visual indicators of current support status.
- Delivery History: How the specific asset was delivered (i.e through which distributor and reseller) and the related document references such as contracts or service agreements.
- Product Serial Numbers
- Current Support Status: Including start and end dates.
- Additional Features: The other accessories, components and upgrade features procured with the product such as additional capacity, trays, or support contracts.
- Customer’s Business Type and Industry
Using this data, the vendor could have immediately designed and carried out a disaster mitigation plan, leveraging information they had around the customer type and the product location. This would have enabled a more strategic and immediate response, including prioritizing densely populated areas such as schools, hospitals, and data centers, and thereby preventing significant risk to the community.
Preventing Recalls on a Global Scale
As supply chains and trade grow increasingly globalized and complex, the number of product recalls has increased as well. According to the Global Recall Portal, which brings together information on mandatory and voluntary product recalls issued around the world from Australia, Canada, Europe, Japan and the United States, there was a 10 percent increase in recalls worldwide over the last four years -- from 3,220 recalls in the portal for 2016, compared to 2,230 in 2013.
Different parts of the world have varied requirements and environments for collecting POS data. North America and Europe have stringent controls to ensure that companies know exactly where their products are located. However, the sales channel in Asia-Pacific often includes multiple layers of distributors and resellers, resulting in more complex POS data that can be more difficult to collect. To address this, many vendors have put incentives in place to help ensure POS data is as complete and accurate as possible.
Accurate supply chain data that is unified across different geographic regions helps minimize uncertainty and confusion during a recall, can reduce a recall’s scope and scale, and enables vendors to execute the recall as efficiently as possible. It also helps to maintain customer trust and confidence when a vendor can be clear about what serial numbers or distribution outlets are affected. This reassures customers that the situation is under control and there’s no risk to them.