Most manufacturing companies face the possibility of a product recall crisis, if not within their own firms, then certainly somewhere within their supply chains. Recall crisis management typically finds a home within literature on crisis management, public relations, communications, marketing and brand management, and related fields. However, this research seldom addresses the operations support that must be mustered behind the scenes. The tumultuous material flows that can occur during a product recall imply a supply chain disruption. An effective response during the heat of a crisis therefore requires the foundation of a well-oiled supply chain. In this article I draw on learnings from the operations and supply chain management (OSCM) literature, integrate them with important precepts from the general crisis management and product recall literature, and identify managerial best practices that will help managers better prepare for product recall crises.
This case presents the challenge faced by Nokia India in 2007. Nokia had built a strong brand reputation over a ten-year period and was a market leader in Indian mobile devices. India, incidentally, was also Nokia’s second-largest market, next only to China. Suddenly, what corporate headquarters considered a routine product advisory for a defective battery resulted in panic in customers after the Indian media widely publicized the potential dangers that defective batteries could pose. Over a three-month period, Nokia India had to recall a few million batteries and replace them with new ones.<br><br>The case provides an opportunity for students to develop practical knowledge of the role of operations management in a product recall situation, particularly in an emerging market context. Product recalls are an integral part of supply chain management (SCM). Companies inevitably face a question of when, not if, a recall will be necessary. These recall situations combine the complexity of operations with the time-urgency of a mission-critical task. The case also provides a rich context to learn about the interaction of SCM, information systems and reverse logistics, and to understand the marketing, logistics, and communication challenges faced by a multinational company operating in an emerging market such as India.
The case provides an opportunity for students to develop practical knowledge of the role of operations management in a product recall situation, particularly in an emerging market context. Product recalls are an integral part of supply chain management (SCM). Companies inevitably face a question of when, not if, a recall will be necessary. These situations combine the complexity of operations with the time-urgency of a mission-critical task. The case also provides a rich context to learn about the interaction of SCM, information systems and reverse logistics, and to understand the marketing, logistics and communication challenges faced by a multinational company operating in an emerging market such as India.<br><br>The case presents the challenge faced by Nokia India in 2007. Nokia had built a strong brand reputation over a ten-year period and was a market leader in the Indian mobile devices. India, incidentally, was also Nokia's second largest market, next only to China. Suddenly, what corporate headquarters considered a routine product advisory for a defective battery, resulted in panic in customers after the Indian media widely publicized the potential dangers that defective batteries could pose.<br><br>Over a three-month period, Nokia India had to recall a few million batteries and replace them with new ones.<br><br>The objectives of the case include 1) developing an effective product recall / reverse logistics plan that would ensure preparedness for the challenges and urgent circumstances that might surface in a recall situation, 2) understanding the key criteria for success of product recall systems and 3) understanding the interface of management action and the logistics system under a crisis situation.
The vice-president Operations of Spartan Plastics, is facing a trade-off. As an avid proponent of the Toyota production system, just in time manufacturing (JIT), ISO 9001, and continuous improvement, he has reduced setup times, batch sizes, and throughput times. On the other hand, the scrap rate has shot up. This case would be appropriate for use in a production and operations course, to introduce students to the concepts of JIT and world class manufacturing.