Practical example
Product Recall: The Case of Lithium-Ion Batteries
A product recall poses significant challenges for companies, particularly small and medium-sized businesses. Often, the affected companies lack the necessary experience and resources. Yet product recalls, in particular, require immediate action and the rapid organization of operational procedures.
Background
Our client, a provider of e-mobility solutions, decided to conduct a voluntary, global recall of its lithium-ion batteries due to its high quality standards for its own products. One of its suppliers had a manufacturing process deficiency that posed a risk to product safety. In addition to a very short preparation time, the particular challenge in this case lay in the size (capacity) of the batteries. Lithium-ion batteries with a capacity greater than 100 watt-hours are subject to strict legal requirements regarding storage and transport.
Specific task
Launching a recall campaign and overseeing it until operations return to normal.
KBC's Approach
The recall campaign was divided into the following work packages:
- Data analysisto identify the affected part numbers and the potential recall volume
- Supplier management toensure delivery capability
- Development of atechnical conceptfor the testing and repair process, including service documentation
- Definition and implementation ofservice processesand structures
- Development of alogistics strategy, including pilot projects with new logistics partners
- Globalcommunicationwith government agencies, dealers, service partners, and customers through various channels
In the event of a recall, there is usually significant time pressure. All activities must be interlinked and well coordinated. A detailed and comprehensive plan of action established at the outset is therefore the foundation of a successful recall campaign.
The first step is to identify the defective products on the market and determine the scope of the recall. To this end, all available data from suppliers, production, and sales was analyzed. Effective traceability of production batches is a key success factor that reduces effort and costs.
Based on the volume of recalls, the availability of replacement parts must be ensured. Often, the need to source large quantities on short notice also poses significant challenges for suppliers. To assist our client, we therefore provided additional on-site support to the main supplier on a temporary basis. To ensure a consistent supply of replacement parts, a robust delivery tracking system was established.
Depending on the type of product, it is important to develop a well-thought-out testing and repair strategy. In this case, the customer’s development, quality assurance, and service departments worked closely together to establish a procedure for testing the functionality and safety of the batteries. Thanks to our technical expertise and many years of experience in the service industry, we were also able to advise the customer on technical issues. Comprehensive service documentation reduced the effort required to train service partners. With the help of a “heat map” we developed, we were also able to distribute the test equipment early on to the service partners with the highest customer density.
In parallel with the technical approach, we worked with the client to establish a special service process. In our client’s case, the recall resulted in a sharp increase in service requests, which is why the existing team was expanded with additional staff. Detailed process planning is essential for this purpose in order to estimate resource requirements. Through the creation of work instructions, communication templates, and intensive coaching, KBC empowered the service team during the ramp-up phase and supported them at the start of the product recall. In addition to defining the processes, this also included setting up tool support for efficient and end-to-end processing as well as ensuring the ability to analyze the data.
Due to strict legal requirements, transporting the batteries in particular posed a major challenge for our client. Working closely with logistics service providers, country-specific solutions were developed and implemented to address this issue.
Public communication serves as the market-driven trigger for a recall. Upon announcement, all affected customers, retail partners, and regulatory authorities (in compliance with the product safety requirements of the respective countries) must be informed. In close coordination with our client’s legal counsel, we drafted the relevant communications, identified the relevant contacts, and carried out a global communication campaign across various channels.
To manage the recall campaign, we established a regular reporting system, which was also required as the basis for progress reports to the authorities. After the initial setup and start-up support, management of the recall campaign was gradually handed over to internal staff. Finally, preventive measures were defined to avoid future recall campaigns. For example, the evaluation of the end-of-line inspection at the supplier was automated to ensure early identification of defect patterns.
