Assessing the Perils of a Product Recall
As recalls become increasingly common in today’s complex, global marketplace, consumer goods producers, manufacturers and distributors can no longer afford to provide goods without traceability. In recent years companies have faced bankruptcy because of lost revenue, hefty fines from the FDA, incalculable brand damage, and a month or more spent recalling products.
Take a look at Blue Bell Creameries. Four months after recalling all products from stores across the US. Blue Bell Creameries finally announced that their “trucks are back on the road.” Blue Bell ice cream had been removed from store shelves in April 2015 when it issued a national recall after its ice cream was linked to 10 listeria illnesses in four states, and three deaths in Kansas. In the months since the recall, thousands of employees were laid off or furloughed. Luckily, the company received financial backing from Fort Worth billionaire Sid Bass to keep it afloat. The Food Safety Modernization Act (FSMA) requires companies to not only have food safety plans, but to exercise them. This involves extensive monitoring of events and safeguards to eliminate the possibility of contamination and then being able to quickly act upon the collected data to mitigate risk. Manual collection and interpretation of this data is costly, error prone and in certain environments impractical. Footnote: Current Good Manufacturing Practice, Hazard Analysis, and Risk-Based Preventive Controls for Human Food; Food and Drug Administration, 09/17/2015
For most product recalls, a company’s ability to quickly manage the situation with both the public and the FDA is a telling sign of its future. The average recall takes 34 days to enact, according to AMR Research, but it doesn’t have to. With proactive planning and the right technology, traceability can be managed quickly and efficiently. Companies can identify the source and all recipients of recalled products, including raw materials and finished goods that are affected all the way up and down the entire supply chain.
Traceability: Having the Right Information Accessible
The first priority of a more efficient recall is traceability, which involves protecting the consumer through faster and more precise identification of the implicated product. This is critical if the product must be withdrawn from the supply chain. Each traceability partner (company) must be able to identify the direct source (supplier) and direct recipient (customer) of traceable items. This is the “one step up, one step down” principle. This requires that supply chain partners collect, record/store and share minimum pieces of information for traceability, which are described in the addendum.
The challenge with traceability can be finding the required information. Often it is during a recall when a company finds it isn’t as organized as it thought it was. Some companies end up spending months trying to find the product information that relates to the one step up, one step down principle, while the health of consumers is at stake.
There is an abundance of data being exchanged between trading partners. However, there are three categories of data for traceability purposes:
• Master data—data that is permanent or relatively constant over time and provides descriptive attributes of products, parties and physical locations (e.g., name of company, contact details, address)
• Transaction data—data created during the real-world flow of products, captured when events such as loading or unloading occur in trade transactions or during a business process in a business arrangement (e.g., time of production, “best before” date)
• Visibility event data—data detailing physical activity of products and other assets answering the “What, When, Where and Why” in real-time (e.g., temperature log)
Much of this data is collected as part of standard set of product data called the Global Trade Item Number (GTIN). GTIN comes from GS1, an international non-profit association with member organizations in over 100 countries. During the past 40 years, GS1 has developed the most widely used supply chain standards system in the world, with close to two million companies doing business across 150 countries. GS1 is dedicated to the design and implementation of global standards and solutions to improve the efficiency and visibility of supply and demand chains globally and across multiple sectors.
The Global Trade Item Number (GTIN) can be used by a company to uniquely identify all of its trade items. The GTIN can be used to identify types of products at any packaging level (e.g., consumer unit, inner pack, case, or pallet). Groups of trade items with similar production and usage characteristics, such as production batches, can be further identified with the help of the batch/lot number, expiry date, and similar data elements. Individual trade items can be uniquely identified using a GTIN plus serial number. Once a company has assigned a GTIN to a trade item, it provides a common language for all of its entities and trading partners worldwide to uniquely identify the item and easily communicate information about the item.
The GTIN can be encoded in a barcode or on an EPC/RFID tag. By scanning the barcode or EPC/RFID tag, companies can efficiently and accurately process products and related information, for example, at the time of checkout in a store or when receiving goods in a warehouse. There are four GTIN formats: 8, 12, 13, and 14 digits. With this type of advanced planning, if a product recall does occur, you can use automatically generated reports to provide all of the information needed by the FDA.
Technology: Capturing Product Information Accurately and Easily
A warehouse management system (WMS), is an enabler of speed and effectiveness. An ideal warehouse management system includes functionality to support traceability, robust integration capabilities, and ease of use.
In the warehouse, there are many ways to collect product information to track and trace your inventory. You can collect it manually on paper or in spreadsheets or you can scan multiple parts of the GTIN (also referred to as multi-scan). However, the most effective data collection tool is single-scan traceability. Single-scan traceability utilizes technology to parse out all of the associated data associated with that one particular GTIN, including Item, MFR, Code Date, Lot/batch, etc. and automatically updates software fields with the corresponding information.
Single-scan traceability is one of the most efficient ways to collect product information and store it in your ERP system. Warehouse management systems should easily integrate with pertinent information from ERP systems, third-party providers, or product information from manufacturing partners.
The ultimate factor is ease of use. You need a technology solution that can be easily adopted within your organization. This way, your order selectors are more likely to use the technology, and use it correctly, to collect pertinent information.
With single-scan traceability, you can stay proactive managing your inventory. Pre-defined parameters such as temperature controls, alerts to bacteria, etc., can tell you right away if a shipment is unacceptable, and you can reject a shipment from a producer while the truck is still at your warehouse.
Initiating a traceability and product recall plan, and investing in technology to enable single-scan traceability, may require up-front time and cost to your company, but the benefits you reap from this investment extend far beyond the perils of a product recall.