Recall Risks and Third-Party Suppliers
06-08-2010
By Mike Rozembajgier
McDonald’s has announced a nation-wide recall of its new Shrek Forever After drinking glasses after the Consumer Product Safety Commission found potentially unsafe levels of the carcinogen cadmium in the glassware’s paint. The recall will affect approximately 12 million glasses, which McDonald’s started distributing just two weeks ago.
Unfortunately, this is only the latest in a growing number of recalls related to cadmium, which is being used with increased frequency as a cost-effective substitute for lead. It also highlights an important factor for companies to consider when planning for a recall. The glasses that are now being recalled were manufactured by a third-party, and that leaves McDonald’s in an uncomfortable position.
As I mentioned in an interview with Greg Farrell of the Financial Times, companies relying on third-parties to manufacture, distribute, or sell their products need to make sure that their vendors and business partners are following the rules and are prepared to manage a recall. Next to consumer safety, which is every company’s primary goal during a recall, brand reputation is the most important consideration. In today’s example, although McDonald’s did not make the glasses, they are the most recognizable brand associated with the recall and face the greatest risk to their brand reputation.
There is hardly a better example of “guilt by association” than in a situation like this where an otherwise well-prepared company is damaged by the actions of a partner. Recall planning must include preparation for events both directly related to a company’s products and those supplied by outside parties.
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