The Drug Controller General of India recently asked NATCO’s anti-cancer drug to be withdrawn, as it failed to pass through certain tests required to certify the drug as safe. Merck’s withdrawal of its arthritis pain medication Vioxx destroyed the brand. Product recalls, especially, for phrarma companies, if not handled well, could prove very costly.
According to the U.S. Consumer Product Safety Commission website, deaths, injuries, and property damage from consumer product-related incidents cost the U.S. more than $700 billion each year.
So god forbid, if you were caught in a situation where you have to perform a product recall, how will arrest brand erosion? How will you minimize the damage? Enter Lot-Tracking: The process of tracking inventory by lot number through manufacturing and distribution processes. Lot tracking helps you with regulatory compliance and of course,
A product recall situation is one of urgency. You don’t have too much time to make critical decisions. And decisions need intelligence. Is your ERP system intelligent enough to tell you, for example, which-lot-who supplied-who-bought? Does your Lot tracking software system integrate with critical business processes like inventory, purchase management, accounting, and sales and offer you a single view of the entire product-manufacturing process? If you are working with information silos, as is the case with most enterprise information eco-systems, chances are you are grappling with workarounds and have no complete control against errors. That said, effective use of technology helps you immensely. Pantaloon’s RFID initiative, tagging apparel with RFID tags, is a great example.
Though a product recall is viewed as a crisis, handled well, you can turn crisis into an opportunity.
The recall of Tylenol in 1989, by Johnson & Johnson, Black and Decker's handling of its defective coffee-makers in 1988-89 are excellent examples. To handle a product recall well, you need the intelligence and information to make quick decisions. The efficiency of your ERP system especially that of Lot-Tracking software, plays a pivotal role in helping you avert a crisis, minimize brand erosion, and turn adversity into opportunity.
Let us summarize what you need to handle a product emergency:
- A seamless information system that allows you to perform forward and backward tracks, so you can pin-point the epicenter of the emergency, down to a Lot.
- Well laid out processes, which with the help of technology, enables faster decision making.
- Engagement strategy for talking to government agencies and your customers.
- People: Pre-selected Contacts within your organization in a time of product emergency: an Emergency Response Team.
- Emergency Communication Tools: For example, Templates for emergency communication (press releases, e-mailers, telephone campaigns)
- Knowledge Management: Say, an easy-to-use knowledge repository that stores recall history and serves as a tool to fine tune your business processes
Is this enough? Not quite. If you noticed the effectiveness of most (if not all) of the above hinges on when the bad news reaches you. Did you get the news early enough? That’s crucial because as mentioned elsewhere, product recall is a situation of urgency. The sooner you are able to plug the gaps and minimize damage, the better. So how early is early? That’s a story for the concluding part of this blog post. Watch this space.
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