Manufacturers need ‘bulletproof’ chain of custody for product recalls - Supply Management

Manufacturers need ‘bulletproof’ chain of custody for product recalls

Farzad Henareh
posted by Farzad Henareh
27 August 2015

Whenever consumer complaints or recalls necessitate product retrieval, maintaining a thorough chain of custody is an absolute necessity. Both scenarios can start as seemingly small issues but quickly snowball into major legal battles.

From the initial point of contact all the way through to the final resolution, the product’s journey must be meticulously documented not only for potential legal issues, but to maintain consumer trust in the brand. Most organisations are not prepared for this level of attention to reverse logistics but it’s important to give it due diligence as it can be a high-stakes game.

Properly documenting a chain of custody requires a coordinated, thorough approach to ensure there are no weak links. Companies are often caught up in the physical logistics of product retrieval and acting quickly instead of documenting the entire process. These are both major points of product retrieval but if litigation does occur, having a bulletproof chain of custody is often a manufacturer’s greatest ally. Product samples can be treated as evidence in a legal case and it falls on the manufacturer to show proper handling of the product after retrieval. If samples go missing or if there are allegations of mishandling or tampering with the sample, these can all be addressed with a dependable chain of custody.

It also serves as added insurance for the manufacturer as it enables companies to confirm if a sample used in court is in fact the same product that was delivered for testing. Also, if a consumer seeks damages following a recall or complaint, holes in the chain of custody make it much more difficult for the manufacturer to defend against all manner of dubious claims. If there is even the slightest chance that a claim could be feasible, it can swing the balance of the case, resulting in higher damages than are truly warranted. It may seem like a small step in the retrieval process but it could be the one that ends up saving the company millions.

When consumer complaints or recalls arise, it’s important to show consumers safety is a priority. With the proliferation of social media the consumer has a stronger voice than ever before. It’s imperative manufacturers address issues quickly and efficiently. A chain of custody is a major part of this process, not just for the legal reasons mentioned previously, but also to minimise the brand impact of the issue.

On a micro scale, complaints are an opportunity to interact with customers. If they’ve had an issue with a product the manufacturer needs to act in a matter of minutes or hours, not days. This pace can lead to miscommunication and errors in retrieval, but these issues are almost always solved by implementing a solid procedure for documenting the chain of custody. Generally speaking, it’s five times as expensive to win a new customer than it is to retain one, so thinking about these events on a micro scale can have a much larger impact on the big picture than one would think.

On the macro level, individual complaints may be the early warning signs of a forthcoming recall. For many regulated products, these complaints must be reported to the corresponding agency. If there are further regulatory issues, a chain of custody can help a manufacturer prove that the samples associated with those complaints were handled properly and the issue given due diligence. Otherwise, the agency involved may object to how the complaints and corresponding product samples were handled.

Large settlements and negligence will always increase the exposure of an issue. Whether it’s from social media or more traditional means, the impact on the bottom line can be exponentially increased if a manufacturer isn’t able to provide solid documentation of the product’s life cycle after retrieval. A bulletproof chain of custody is imperative in every recall plan and if handled by a third party, it can add additional validity to its authenticity from all parties involved.

Farzad Henareh is managing director of Europe at Stericycle Expert Solutions

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