1

Nestlé’s Approach to Product Recalls

Johann GroszQuality Manager Africa, Asia, Oceania

2

Presentation

Introduction

- Quality Products- Nestlé Quality Management System (Pro-active)

1. Crisis Preparedness (Pro-active)

2. Crisis Management (Reactive)

Product Recall (Presentation Title) is a possible action during Crisis Management

3

Introduction

Nestlé sells around

1000 Million (1 Billion) Products/Day.

4

Introduction

Consumers trust Nestlé daily and buy our products again and again.

Claim: Quality is our most successful product!

Quality: - safe products- legally compliant- sensory, preferred products- nutritional products- consistent quality- convenience aspects- good value for money

Consumer Satisfaction

5

Introduction

Quality, as we all know, does not happen by chance.

We apply the Nestlé Quality Management System to achieve Quality & Consumer Satisfaction and to prevent Quality problems.

- ISO 9001 aligned, process focussed approach- Quality is everyone's commitment- ISO 22.000 in our factories (Food Safety)- Every function must contribute to Quality- Lean & TPM programs- Aim: Zero defects

Food Safety – our consumers trust Nestlé

6

Consumer Trust

7

Quality System

delivers Quality Products

- There is no perfect Quality System- Failures are rare events - Failures can lead to Quality Problems and

& Crisis Situations

What are possible reasons for Quality Problems ?

8

Reasons for Quality Problems

- Contaminants in supplied materials- Foreign bodies- Packaging material issues- Allergen issues (hidden allergens)- GMO- Technical breakdowns, e.g. leakages- Human errors- Sampling- Criminal Acts- False analysis results & wrong interpretation- etc.

Wrong attitude: This cannot happen to me …

9

Crisis Management: Good or Bad

Bad Crisis Management:

- Company image first - Not consumer focused!- Cost driven (Recall will cost money)- Delayed reaction- Ambiguous communication – different messages- No clear leadership; not managed by the Top

Management

Crisis must be managed

Consumer Trust built up over years can be lost.

10

Crisis Management at Nestlé

11

Nestlé Quality Management System

Management Process:

Crisis Management

Each Market, Business, Zone and the Centre implement an effective Crisis Management procedure in a manner that protects our consumers, our assets and Nestlé’s image and brand.

Key sentence:

… protect our consumers ….If something goes wrong for quality: “Put People First”:

The health and safety of our consumers, employees, customers and people in the local communities is our main concern.

12

Crisis Management

Support Document:

Handbook for Crisis Preparedness and Crisis Management.

Part 1 = Crisis PreparednessPart 2 = Crisis Management

13

1. Crisis Preparedness (Market)

1.1 Issue Round Table (Experts discuss possible forthcoming problems)

1.2 Monitor Media1.3 Relationship with Media1.4 Relationship with Authorities1.5 Set up a Crisis Committee

Crisis Manager, Crisis Coordinator & Other FunctionsCrisis contact list

1.6 Crisis Scenario Planning1.7 Identify your Stakeholders

Stakeholder list1.8 Internal communication rules1.9 Training & Simulation 1.10 Crisis Room & Resources 1.11 Verification - Preparedness

14

2. Crisis Management (Market)

2.1 Information about a Quality Problem from

Suppliers, Customers, Factories, Consumer Service, Supply Chain, Authorities, Media etc.

2.2 Evaluation by the Technical Manager & Quality Manager+ collect relevant information: incident details,

traceability results (!), complaint history, scientific information etc.

Result can be: Activate the Crisis Committee

15

2. Crisis Management (Market)

2.3. Crisis Committee

Crisis Manager (Top Manager) + Other Functions:

- Evaluate the situation based on facts(safety issue, legal problem, product quality problem not safety related, media issue etc.)

- Decision – fact based - e.g. in case of a food safety issue Public recall

- Decision about the communication strategyImportant: to speak with 1 voice

Progress Review and adjustment of the action plan if needed

16

3. Crisis Management (Market)

3.4 After the Crisis

- Assessment: How was the Crisis Management ?

- Root Cause Analysis:

- What happened ?- Why did it happen ?- What were the damages ?- Review of the Action Plan- What are the learning's ?

- Root Cause Analysis Corrective Actions- Circular: Can this happen to you ?

17

Summary

Things can go wrong and we saw in the past crisis situations & recalls for all types of products – cars, electronic hardware, toys, food etc.

- Pro-active Quality Management System in place

Prevent Quality Problems

- Be prepared – attitude: A crisis can also happen to me.

I. Crisis Preparedness

In case of a crisis

18

Summary

II. Strong Crisis Management

- Consumer first - Quick reaction - Transparent, honest communication

If a crisis is well managed Limit the damage

19

Summary

Maintain trust of the consumers!

20

Thank You !