Beware the dangers of product mislabelling
As City law firm Reynolds Porter Chamberlain reveals that the highest ever number of recalls was recorded during the past year, more effective risk management has become a key item on the corporate agenda. According to figures released by the firm, product recalls jumped by 12 per cent from 205 in 2009 to a record 229 in 2010. The number of recalls of pharmaceutical and other healthcare products leapt up by an astonishing 40%.
The potential impacts of revenue and market-share losses following any product recall can be catastrophic and far reaching. As well as facing a bill of millions to recall a product, manufacturers may be hit with the cost of product write-off, customer reimbursement and litigation payments as well as the loss of sales and market share due to unfavourable publicity, loss of consumer confidence, and, at least in the short term, increased regulator action. According to a study released by the American Society for Quality (August 2003), each product recall costs an organization, on average, more than $8 million and this is a conservative estimate!
As the regulatory environment becomes increasingly stringent - there is less tolerance for artwork error. Today, one of the major causes of recalls is mislabelling. In the US, the Food and Drug Administration (FDA) regularly monitors labels for false claims and errors. As a consequence, packaging artwork errors are now considered to be the largest source of product recall in the global pharmaceutical industry. In 2009, a major pharmaceutical manufacturer was forced to withdraw some 100,000 packages of cold capsules due to improper labelling, caused by human error. One single error affected nearly 4% of the company’s packages worldwide.
Feeling pain in artwork operations
Whatever the product or sector, when something goes wrong with package information or design, the impact can be significant. The best way to avoid a recall is to get packaging artwork right the first time. Yet, for a surprising number of multi-national companies, packaging artwork is often overlooked. The process of artwork management is plagued with difficulties and issues. More often than not, valuable time and money is wasted on complex manual approval processes that rely on inefficient methods of sharing and communicating information. Businesses have to contend with documents stored in different systems and databases and since artwork changes engage many different functions, have to cope with integrating information from multiple sources both internally and externally. This is a significant challenge and changes to labelling artwork are rarely handled efficiently or systematically. It is this reliance on these outdated, inefficient manual processes that makes it difficult to control and audit the complexity of labelling efficiently, leading inevitably to errors in artwork, that all too often aren’t spotted until it’s too late.
Drivers for improving the overall artwork process.
These issues have become even more pertinent with the pressure of globalisation, mergers, restructures, and increasingly complex product and regulatory mandates that make risk much harder to assess and manage. The logistical hurdles companies face by outsourcing, both on and offshore are further exacerbating the problem as companies may not be adequately managing the risk posed by business partners’ manufacturing and legal practices. In this current climate, it is essential that companies have clearer management and greater control of their packaging, allowing them to avoid the serious consequences of a product recall caused by artwork errors. Now, more than ever, industry leaders need to be equipped with the risk management strategies and technologies to gain a competitive edge and optimise efficiencies.
In order to decrease the risks and repercussions of product recalls, companies urgently need to tighten up their supply chain quality and internal manufacturing processes.
Many companies are now discovering that there are process and technology solutions to meet these problems, and that dramatic improvements can be made. Kallik's Artwork Management Solutions (AMS360) reduces package development costs through streamlined and automated artwork processes, removing the delays inherent with inefficient, time-consuming and error-prone processes. Crucially, highly functional management tools allow users to set brand and manufacturing rules around content removing the risks inherent with the manual process of artwork production. Payback comes from improved risk management strategies, reduced and simplified approval and processing times, reduced risk of human error and greater opportunities for consolidation of resources.
Companies that generate their artwork automatically have already seen return on their investment in terms of cost, time and resources. The benefit of this sophisticated technology in terms of managing risk is too strong to ignore and businesses that do not adapt will find themselves behind the times.
The time is right to implement the correct technology and processes necessary to assure the long-term viability of robust risk management strategies. Waiting for a product recall to occur before addressing fundamental inadequacies in packaging processes will be too little too late.
