Recall: CIO's Loom Large in Reclaiming Damaged Product

Good Data Management Impacts Branding

Kim Nash is a senior editor at CIO Magazine. Kim wrote me the other day and included a copy of a great in depth article on product recalls.  CIO Magazine writes about systems, data and business processes. Let me tell you...when your product goes bad...and you need to get it back before somebody gets hurt, processes and data matter.

The attached article talks about ConAgra Foods and how it is managing not only the recall and eventual rebranding of Peter Pan Peanut Butter, but other food products as well.   When your product goes bad, the first thing you need to know is where it is.   That means your supply chain needs to keep visible records of where product is, both in storage and in transit. If the product was delivered to an end customer, what lot went to what store, in what quantity and when?

Was this a problem with the crop, shipping inbound to manufacturing, storage, manufacturing processes, packaging?   This gets to be a forensic engagement worthy of CSI:Las Vegas. Questionable safety is a killer of branding.

Peanut butter is one of those items that gets branded on you by your Mom.   What she served, is likely what you buy. Mayonnaise and ketchup are a couple of others that receive similar reverence. My wife knows that there better be one kind of Mayo in our house, and its what my mama served. My brother-in-law is the same with peanut butter. For us southern boys, this is like God and country. 

Now assume your peanut butter is no longer trustworthy.   Are you going to feed it to your kids?  NO.  There went 40 years of product indoctrination.  For companies, that means get the bad stuff back...as fast as possible, but do it without killing every cash reserve available.  That means being efficient. That takes systems. 

Get that bad stuff off the shelf in a hurry though, because as soon as my wife decides that mom's preferred brand might hurt her babies... game over.  You ain't never getting another jar of that other stuff in the house again.  This runs deeper than peanut butter folks.  Don't mess with it.

Supply chains have three components.   Product, Money and Data.

In a recall, its the data that matters most.  Where are the goods?   CIO's are called upon to find that out by working with systems and the company logistics and supply chain team.  Their data is used to minimize the hit on the companies money and to recall as much product as necessary, but not more than is required.   If your systems are bad, you have zero chance of doing this.

Visibility and order systems play highly in this puzzle.   Having good visibility systems are critical to handling recalls. Once the goods are identified, they can be reclaimed, tagged and destroyed. Inability to know where your product is, even after you sold it, means that reclamation is messy and costs more than it should.

clipped from www.cio.com Beyond Peter Pan:  How ConAgra's Pot Pie Recall Bakes in Hard Lessons for Supply-Chain Management From peanut butter to bikes, product recalls are breaking records. Will your supply chain be ready when you have to run it backward in order to track, trace and collect a recalled product? October 22, 2007 - CIO - At lunchtime one day last January, Jill Hein, an Iowa mother of eight, took a jar of Peter Pan peanut butter - the kind with Peter, in his feathered cap, on the label - out of her pantry. She opened the lid. Everything seemed fine. No funny odor. No odd color. Hein fed the Peter Pan to one son and one daughter. Within hours, they were cramping and vomiting. Hein’s 3-year-old boy, Bowen, had to be taken to the emergency room the next day. Hein ate some herself two weeks later and was hospitalized for dehydration. And renal failure. Alone or with jelly, peanut butter is as classic as Elvis, who preferred his on white bread, mashed with bananas and     fried. Americans eat 700 million pounds of crunchy and creamy each year—enough, the Peanut Advisory Board says, to coat the floor of the Grand Canyon. Hein never expected a simple peanut butter sandwich to go so wrong.    Neither did ConAgra Foods, the $12 billion conglomerate that makes Peter Pan.    One of ConAgra’s oldest and best-known brands, Peter Pan brought in $109 million in sales last year, says Information Resources, which tracks retail spending. ConAgra  also supplies some of Wal-Mart’s Great Value house brand and sells peanut butter toppings to companies like Carvel and Sonic, bringing total peanut butter sales to $147 million last year. But when an outbreak of a rare salmonella strain was traced to ConAgra peanut butter, the company would have to try to get it all back. The Peter Pan recall eventually involved 326 million pounds of its own and Wal-Mart’s peanut butter, plus 99,953 cases of toppings. So far, ConAgra has spent more than $78 million dealing with an estimated $1 billion worth of potentially infected product. Its peanut butter sales were down 63 percent in fiscal 2007, the company says. No one knows how much ConAgra will need to spend to re-establish trust in its product. Hiring Tinker Bell to ask people to clap if they believe in Peter Pan won’t fix this. Why Recalls Depend on the Supply Chain Peanut butter isn’t ConAgra’s only recall trouble, either. The company has had to call back hundreds of   pounds of ground beef in the past few years, and this month ConAgra’s Banquet pot pies were recalled when at least  211 people in the U.S. got salmonella poisoning, which the Centers for Disease Control and Prevention links to the pot pies. That recall is ongoing. Check out the history of Famous Recalls:  15 years of products gone bad

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Comments

[gyoengyi]

Hej Eric,

Thanks for the link to the CIO list of famous product recalls. Discussing the Mattel case, we started to think about yet another matter - the question of closed loop supply chains (see http://interorganisational.org/2007/08/14/product-recalls-and-customer-orientation/). Information flows certainly play an important role there...

Rgds,
Gyöngyi