| PRODUCT SAFETY MANAGEMENT AND CORPORATE CULTURE |
| Author: Kenneth Ross |
An effective product safety management program can help to reduce accidents, reduce recalls, reduce insurance premiums, increase the safety and quality of products, provide a more defensible product and company in the event of litigation, and minimize the chance of punitive damages. And the techniques have been well developed for decades.
With that said, why are so many manufacturers being sued and fined by government safety agencies? Why are so many products being recalled, many times by well-known and respected manufacturers? Why are legislative bodies here and around the world enacting sometimes oppressive legislation to force manufacturers to do a better job of providing a safe product? Obviously, companies must not be devoting enough resources to these efforts or are making bad decisions. Why is that?
As someone who has counseled manufacturers on product safety, regulatory compliance, and product liability prevention for over 30 years, I have seen many answers and excuses. These include:
• We haven’t had too many problems yet;
• Safety problems are the cost of doing business;
• Everyone’s job is product safety;
• That’s why I have insurance;
• My parts supplier will take care of the problem if anything happens;
• It costs too much, and I can’t cover the cost in my prices;
• My competitors aren’t doing these things, so how can I justify the effort and expense;
• I don’t know what elements of a program are important for my company to implement; and
• This won’t protect me from product liability lawsuits.
As I said before, the elements of a program to deal with pre-sale and post-sale safety issues are well-known. They generally are:
• Product safety policy;
• Product safety manager;
• Product safety committee;
• Training for personnel involved in product safety; and
• Procedures to confirm safety such as risk assessment, design reviews, conformity with applicable standards, adequate development of warnings and instructions, review of marketing materials, documentation guidelines, and post-sale investigation and analysis.
But the most important question is what should my company do and how should I do it. Fortunately, there are a variety of standards and guidelines on safety management that can be helpful.
ISO 10377
ISO 10377 was issued in 2013. The rationale for the creation of this new standard is to assist small and medium-sized product suppliers in trying to produce safe consumer products and comply with the new safety legislation and regulations that have recently been enacted by various countries. The problem perceived by the drafting committee is that many suppliers have "limited experience, few available resources, or practical reference documents to guide them through this process. "
Specifically, in the Introduction to this standard, it says:
…presents what needs to be done to identify the hazards and to assess and manage the risks - from the design of the product, to the input of raw materials, to production, to distribution, to retail and to the ultimate product end- user and disposal.
The first two sections entitled Basic Principles and General Requirements discuss promoting a product safety culture within the organization and outside the organization. In addition, they discuss the organization’s commitment to provide safe products and to ensure that these products undergo continuous improvement.
Also, there are discussions concerning an organization’s commitment to providing appropriate training of its employees, adequate resource allocation and appropriate records management and document control. Lastly, the general requirements section discusses an organization’s commitment to comply with all applicable laws, regulations and standards and to undertake activities which allow the product supplier to both identify and trace that product back to its original producer.
There are useful sections on design, production, and actions in the marketplace as well as good information and samples in various Annexes.
This standard tracks the techniques that those of us in this area have been recommending for decades. However, this standard performs a useful service by identifying and assessing these techniques and best practices and organizing and restating them in an understandable way.
Unfortunately, as one would expect, it is not as practical as companies would probably like it to be. It is impossible to create a standard or recommendations telling all companies how they should manage safety. Therefore, in the Introduction, it says "[The standard] does not necessarily explain how it should be achieved. " This means that it still requires the supplier to decide which of these best practices are appropriate and necessary for their company.
There are very few absolutes in product safety management and product liability prevention. Some company’s products have such a low risk that many of these best practices are not necessary to undertake. In addition, some products can be reasonably safe and pose no unusual risk if they just comply with applicable technical standards. However, the standard, as written (by liberal use of the word "should "), requires companies of any size and for any consumer product to implement certain processes and techniques which may not be needed for their particular company or product. The standard should have provided more flexibility and been written so it doesn’t create an unnecessarily high bar for all companies to meet.
In addition, the standard is general and somewhat vague in discussing some of these techniques. This is necessary in that there are no clear answers to certain questions. So, manufacturers should consider this standard in evaluating their own programs or in determining what programs to implement. And they should document why they have not adopted some of the procedures in this standard so that they can respond to future questions as to why they didn’t do more.
CPSC
The U.S. Consumer Product Safety Commission ("CPSC") has always encouraged companies to implement active product safety management programs. It has had available a Handbook for Manufacturing Safer Consumer Products for many years. For the current edition of this handbook, see www.cpsc.gov/s3fs-public/pdfs/blk_pdf_handbookenglisha ug05.pdf.
The CPSC has also created a "safety academy" that discusses best practices in product safety management in general and specific elements of such a program. This academy can be accessed at cpsc.gov/Business-Manufacturing/Business- Education/Safety-Academy/Step-6. And, last the CPSC has a guidance on recall planning (www.cpsc.gov/Business- Manufacturing/Recall-Guidance/Be-Prepared-Recall-Planni ng) and a recall handbook which discusses pre-recall and post-recall actions. It can be accessed at cpsc.gov/s3fs-public/8002.pdf.
Beyond these resources, the CPSC does not help companies decide what they need to do and does not approve safety program. So, it is still necessary for a company to make sometimes tough decisions.
Conclusion
No matter what a manufacturer does, it is always possible that its product safety program is lacking in some respect and could arguably constitute evidence of a disregard for safety. To combat that possibility, any program must be able to show a high regard for safety, both on paper and in actions. If this showing is made, even if the jury or a government agency believes that the manufacturer could have done more, it should also believe that the manufacturer tried to do the right thing and may not be inclined to award punitive damages or assess civil penalties.
The techniques are well-known; the difficult part is to analyze what is appropriate for a particular company and then incorporate it into the company’s organization, culture, and processes. Doing so should pay for itself, either by preventing future problems that could arise or giving the manufacturer a much better defense if accidents do occur. Kenneth Ross is associated with Bowman an dBrooke LLP,has counseled manufacturers and product sellers for over 40 years, and is a frequent contributor to publications and other media on product safety matters. His writing can be found at www.productliabilityprevention. com. Email: [email protected]. |
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