Product Recall

Definition…………….

A product recall is a request to return to the

maker, a batch or an entire production run of
a product, usually over safety concerns or
design defects or labeling errors
Understanding Recall….
Understanding Recall….
Understanding Recall….
Indian Example of Product recall

 Nokia- Mobile phone batteries BL-5C (manufactured

in China but for Matsushita, Japan) have been
recalled for getting overheated and bursting
during charging- Although most of mobile sets heat
up while in use for a longer period continuously-this
is yet to be addressed by mobile manufacturers who
are busy reducing instrument size. In perhaps the
largest product recall in India, mobile giant Nokia
recalled 46 million batteries pursuant to customer
complaints across the globe.
Recall Globally….

 IBM and computer maker Lenovo announced in

September 2006, a recall of 526,000 laptop
batteries worldwide made by Sony Corp. because
of a fire risk. The recall affects the lithium-ion
batteries found on the ThinkPad Notebook line of
laptops, which were sold by both IBM and Lenovo.
Sony Corporation also announced it would initiate a
global replacement program of the company's
lithium-ion batteries but did not provide any details of
the program.
Steps to a product recall
Steps to a product recall

 Issue identification : Maker or dealer notifies the authorities responsible of

their intention to recall a product. Consumer hotlines or other communication
channels are established. The scope of the recall, that is, which serial numbers
or batch numbers etc. are recalled, is often specified.
 Recall notification : Product recall announcements are released on the
respective government agency's website (if applicable), as well as in paid
notices in the metropolitan daily newspapers. In some circumstances,
heightened publicity will also result in news television reports advising of the
recall. When a consumer group learns of a recall it will also notify the public
by various means.
 Product removal, destruction and replacement: Typically, the consumer is
advised to return the goods, regardless of condition, to the seller for a full
refund or modification.
 Feedback
Reasons for product recall

 Poor product design

 Quality assurance failure
 Outsourced vendor makes mistakes
 Product was not tested enough by
company and launched in market.
Consumer Identification Techniques

 Direct M ail
 Press Release
 Video News Release
 Posters in Retail Stores
 Call Program s (in and out-bound)
 Web Sites
 Advertising
Managing product recalls

• Assessing the scope of the recall;

• Identifying affected product(s);
• Investigating the cause of the problem;
• Reviewing relevant insurance policies;
• Assessing compliance with government regulations –
•for the company and its suppliers;
•timely management of recall and replacement efforts;
•accounting for lost sales and the total cost of the recall;
•establishing a claims-processing mechanism;
•developing tailored information-management systems.
Managing product recalls
 Accurately determining the scope, nature, and extent of the
loss
 Applicability of insurance policies,
 Managing regulators and the consuming public.
 Marsh's Global Product Recall Solutions and Prevention Practic
e
works with clients to quantify potential exposures, analyze
resources available to respond to such risks, and ensure that
the proper solutions are in place to optimize insurance
recoveries and limit the financial and reputational impact of a
product recall. Marsh’s consultants also assist clients in
developing methodologies to help them avoid product recalls.
 Using techniques such as RFID (For traceability and better
hand ling of products in stores and supply chain)