In business, no product is immune to the risk of a product recall. Research suggests that product recalls in the United States have been on the increase. In 1988, the U.S. Consumer Product Safety Commission was involved in some 221 recalls, and by 1993, that number had risen to 367 recalls.
These product recalls can have huge knock-on effects for the firm, damaging the brand and even threatening the company’s welfare. Effective business management software is an indispensable tool for successfully pulling off a product recall with as little damage as possible.
For distributors, failing to have the right software in this situation can have huge ramifications. This may incur large fines or entail expensive lawsuits, and it may even shut the company down for good.
Below, we summarize how you can handle a product recall with the right inventory software to lessen the impact of this situation.
Invest in preventative software
In the frenzy of a product launch, dealing with a product recall is typically the last thing on the manager’s mind. However, it is essential to take precautionary steps ahead of time to minimize any potential damage in the future.
Ideally, companies should invest in a full inventory and accounting ERP system complete with lot tracking capabilities. Software with lot tracking capabilities will enable you to track products by lot or batch number from the manufacturer through to the supplier and finally, to the end consumer.
This software also allows you to track which vendors sent out which products to whom, and at what time. This information will make a product recall much easier, allowing you to resolve the issue as fast as possible to avoid any damage to the brands reputation.
Urgency in product recalls
The aim in this situation is to, primarily, reduce the amount of time it takes to recall the product and resolve the situation. That is why it is also important that managers consider software features such as internal and external lot number tracking, auto-generated lot numbers and the printing of lot (or batch) information on packing slips. These software features will help move the recall process along to avoid further delays.
Other software features that management should consider when looking to prepare for a product recall includes the ability to pre-assign lot numbers based on expiry dates, alerts for expiry dates and lot tracking reports which track expiry information.
Customer Relationship Management software
It is also important to invest in quality Customer Relationship Management (CRM) software in order to ensure that communication between all parties flows smoothly and effectively. A good CRM system will provide up-to-date customer and vendor information, allowing managers to quickly notify a large volume of customers or vendors of a product recall.
Recovery after a recall
The aforementioned lot tracking system will allow users to access information regarding any product recalls. Accurate cost and sales information will help managers to account for any loss of revenue caused by a product recall. To prepare for the future, it may be useful to use some of the many government regulated websites which provide up-to-date information on product recalls. Some websites also provide the option to subscribe to automated email notifications about product recalls.
Article by Melanie Chan in collaboration with our team of Unleashed Software inventory and business specialists. Melanie has been writing about inventory management for the past three years. When not writing about inventory management, you can find her eating her way through Auckland.