Edition 62
Reverse Logistics Talk
by Jennifer Bilodeau, Reverse Logistics Specialist, Independent

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The United States Food and Drug Administration (FDA) regulates may items including food, drugs, medical devices, electronics that emit radiation, as well as many other products that could potentially harm public health, safety, or cause death. The FDA enforces laws and regulations that are becoming increasingly complex challenging the food and beverage industry. Industry leaders and professional associations are encouraged to join the process of developing government approved industry standard to protect the health and welfare of consumers.

There are many organizations across the food and beverage industry that have worked with government agencies developing policies and procedures to protect the supply chain. Manufacturers and retail distributors are challenged when importing products although the FDA has increased their presence in foreign countries providing assistance to enhance food safety measures for foreign exporters.

The FDA has traditionally acted in reaction to an event or loss but in recent years has changed their organization to focus on prevention by implementing “farm to table” security measures. Manufacturers are becoming more committed to conducting self-audits to detect food contamination before a health risk or death occurs. Recalls are now voluntarily initiated where the manufacturer can initiate action, or, the government can mandate a recall.

Most manufacturers of food products are working in conjunction with professional associations and the FDA developing procedures that limit risk to food contamination. Regardless the efforts an organization in the supply chain may implement, there is always the possibility of a recall whether due to a supplier issue, an internal problem, or intentional act of tampering or contamination. Taking immediate corrective action and implementing crisis management plans will mitigate the crisis. What are the best methods of preparing for a recall event? Will the development of a comprehensive response plan including communications, recall processes, and technology; is it possible to minimize risk and potential liability?



Risk Management
A food recall occurs when any corrective action is taken by a company protecting consumers from contaminated or mislabeled products that could potentially bankrupt the organization. Strategic planning to develop best practices and quality control checkpoints throughout the manufacturing process assists reducing liability. Although a company may have liability insurance, “it will not cover the expense of product retrieval nor will it impact customer trust” (Kaletunc & Ozadali, 2012).

A company at any point throughout the supply chain should consider not only regulatory food safety requirements, but develop internal safety policies. The primary goals of structuring a recall policy should be in place to protect consumer health, comply with existing government regulations, minimize recall costs, and rebuild brand and reputation with the public.
Maple Leaf Foods suffered a significant loss due to listeria contamination at a Toronto facility. From the point of suspicion of contamination to Maple Leaf sending notification to distributors to stop shipping products was approximately a two month gap. It took an additional two weeks before Maple Leaf announced a nationwide recall of three deli meats. Two weeks later, the recall was expanded to 223 product lines. Ultimately, there were twenty deaths and the company suffered over $250 million in damages. “The United States faced a similar listeria crisis resulting in 15 deaths from listeria contamination that resulted with increased food safety requirements such as boiling meat or adding anti-microbial agents, however, the Canadian government did not require this process” (Stanwick & Stanwick, 2012). By examining industry standards, a company should implement additional safety measures to reduce risk of contamination.

Maple Leaf discovered the listeria bacteria inside two automated slicing machines after they had been dismantled for extensive testing. The machines were sanitized daily, but the bacterium was found to be growing inside the equipment beyond the reach of their sanitization process. This identifies the need for manufacturers to seek continual process improvements identifying potential food safety gaps as well as developing cooperative and communicative relationships with vendors and suppliers creating a knowledge base for food safety and mutual profitability.
Maple Leaf struggled to manage the crisis, delayed in confirming suspicions, and had difficulty tracking contaminated foods that had already left their warehouse which contributed to the significance of the total loss.

Inventory Management and Recalls
In the event of a recall, crisis management plans should be implemented. Distributors and suppliers should be contacted immediately to stop shipments, but developing a system to identify the location of product is critical. Radio Frequency Identification (RFID) tagging is the most effective technology that provides efficient and accurate data. Maintaining a controlled inventory process can limit exposure and expedite the recall process. A manufacturing plant has an opportunity to identify critical information such as the food supplier, date the shipment was received, weight, and any other pertinent information such as temperature that will reduce the opportunity for contamination or spoilage. As food travels from the original source throughout the manufacturing process and distribution chain, it is handled by a significant number of people before it is consumed. There are many opportunities along the supply chain for accidental or malicious mishandling that can lead to contamination or spoilage” (Motorola, 2008). RFID should be used to catalogue a history of the food throughout the manufacturing and distribution channels.



Customer Relationships are also critical to mitigate risk, including the retail level. American consumers often rank convenience over price resulting in widespread contamination. If a consumer were to buy a bag of ready to eat clean and cut salad mix instead of a head of lettuce, instead of one family affected by contaminated lettuce you could potentially have a food contamination illness in epidemic proportions. Recordkeeping is critical throughout the supply chain.

The Importance of Documenting
Formally documenting a recall plan is critical to establishing commitment and adoption of the agreed processes and procedures to mitigate risk and initiate a recall claim. “Effective risk management requires documented policies and procedures that identify how a product will be handled throughout the supply chain” (Creedle, 2007). Documentation should include the processes for quality of goods received, the manufacturing process identifying procedures for quality control testing at critical checkpoints, how complaints are handled, and what to do in the event of a recall. By establishing corporate goals and ethical guidelines, in the event of a crisis the plans can be immediately implemented reducing loss.

By implementing and documenting a recall team identifying individuals, their roles and responsibilities in the event of a crisis will eliminate delays and confusion while reacting to an event situation. Roles to consider while planning a team response would be “decision making, quality assurance, technical advisor, media communications, complaint investigations, contacting customers, contacting regulatory agencies, and legal counsel” (Food Software Advisor, 2012).

Documenting consumer complaints is critical in the recall process to limit risk and exposure to consumers, utilize information to improve processes or uncover critical facts, and control potential losses. Some critical points to record would be the bar code information on the product itself identifying lot, block, expiration, and any other pertinent information from that code. Additionally, a person investigating the complaint should document where the product was purchased, how the consumer stored and handled the product.

“Every recall plan should include a step-by-step explanation on what to do when a product needs to be recalled” (Food Software Advisor, 2012). Developing a communication log identifying all contacts with vendors, suppliers, and any other stakeholders will be critical information for any government investigations, consumer law suits, and will provide the organization valuable data that can assist in continual process improvement initiatives.

Product Recall Training
Product recall training is a critical component to improving the recall process. By educating staff on their roles and responsibilities throughout the organization, and identifying a recall team to take the lead will help employees manage recall efforts in their area of responsibility.



Prevention is always preferable, but even with the best plans and controls in place there is always risk of a recall. To prepare employees and gauge the efficacy of documented crisis management plans, a company may consider conducting mock recall training. With a mock recall, the company will be provided an opportunity to test their plan, their inventory tracking system, communication logs, as well as the processes throughout the recall. A mock recall can uncover deficiencies in the plans and identify opportunities to improve recall strategies.

Conclusion
Maple Leaf food experiences significant losses greatly attributed to the lack of planning and quality control checkpoints. The organization was forced to react to a crisis event, rather than a position of control to manage the event a limit loss.

Wegman’s food stores has a vendor management specialist that maintains vendor relationships and ensure the quality and safety of products sold. This assists the grocer in identifying recall items as well as making business decisions pertaining to independent recalls in the event of an unconfirmed contamination, labeling, or food quality concern. A recall coordinator is in place that initiates immediate response removing products from the shelves in retail locations and distribution centers throughout their entire footprint. The company takes the lead by educating customer service about the recall and prepares them to respond to consumer questions or concerns. The retailer also provides information on their company website. If a consumer has maintained correct contact information, the customer relationship management software identifies which consumers purchased recall products and initiates an automated phone call and email with return instructions. Automated phone calls are limited to confirmed cases of food contamination that could cause a health concern.

A well designed and documented food recall plan must be an extension of day to day operations management. Knowing a vendor and maintaining a relationship is critical to mitigating potential risk and improving quality of product. Inventory management, tracking, and customer relationship management will assist in facilitating communications to expedite the recall of foods limiting both consumer health and financial. Testing crisis management plans and training staff on their roles and responsibilities in a food safety and product recall incident will be beneficial. Training will instill confidence and uncover deficiencies that will ensure an organization is not on acting quickly to respond to a public health incident, but to control and manage the incident limiting loss.

References
Acheson, D. W. (2012, March 26). Recalls and warning letters still high in 2011. Food Safety News. Retrieved November 21, 2012, fromhttp://www.foodsafetynews.com/2012/03/recalls-and-warning-letters-still-high-in-2011/
Creedle, E. (2007). Bon appetit: Food recalls and illness reinforce need for better risk management. Risk Management, 54(7), 40-44. doi: 226982731
Proquest
ElMekkawy, T. Y., Hachkowski, P. A., Strong, D., & Mann, D. D. (2006). Defect analysis for quality and productivity improvements in a manufacturing system. Canadian Biosystems Engineering, 48, 7.9-7.12. Retrieved December 8, 2012, from http://www.engr.usask.ca/societies/csae/protectedpapers/c0522.pdf
FDA regulatory information. (2012, February 3). Comment on Proposed Regulations and Submit Petitions. Retrieved November 21, 2012, fromhttp://www.fda.gov/RegulatoryInformation/Dockets/Comments/default.htm
Food Decision Software. (2012). Recall Plan Templates [Brochure]. Author. Retrieved December 8, 2012, fromhttp://www.fooddecisionsoftware.com/recall_plan#1. Recall team
FSIS Food Recalls | USDA Food Safety and Inspection Service. (2011, October 14).
FSIS Food Recalls | USDA Food Safety and Inspection Service. Retrieved November 21, 2012, fromhttp://www.fsis.usda.gov/FACTSheets/FSIS_Food_Recalls/index.asp
Guidance for industry: Product recalls, including removals and corrections. (n.d.). U.S. Food and Drug Admininstration. Retrieved December 05, 2012, from http://www.fda.gov/Safety/Recalls/IndustryGuidance/ucm129259.htm
Kaletunc, G., & Ozadali, F. (n.d.). Ohio State University Extension Fact Sheet. Understanding the Recall Concept in the Food Industry. Retrieved December 07, 2012, from http://ohioline.osu.edu/aex-fact/0251.html
Motorola. (2008). Improving the safety of the food supply chain: The value of RFID and traceability on a growing problem[Brochure]. Author. Retrieved December 5, 2012, fromhttps://portal.motorolasolutions.com/web/Portal/resources/docs/ngem/pdf/RFIDFS-Whitepaper-0808.pdf
Stanwick, P. A., & Stanwick, S. D. (2012). The food recall crisis at Maple Leaf foods. The Business Review, Cambridge, 19(2). doi: 1021060389

RLM
Jennifer Bilodeau, a Reverse Logistics specialist, formerly supported the Department of the Defense in day to day management of both inbound (return) and outbound distribution of goods throughout the command. She was recognized for exemplary performance throughout the base relocation effort working with internal/external stakeholders managing multiple projects assessing tangible goods for movement to new facilities, acquiring replacement items, as well as recapturing value from left behind products. In this role she oversaw reverse logistics operations including repair and warrantees, secondary markets, deconstruction and re-utilization of parts, as well as final disposition instructions.

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