LPOs Should Study History of Product Recalls

May 6, 2010

“Quality is Job 1”
Many in the U.S. may remember that Ford Motor Company slogan in the 1980’s to 1990’s.  Quality was in fact a winning formula for Ford as it gained market share and proved its heritage from the days of Henry Ford. And ‘Total Quality Management’ (TQM) was one of those fads, or flavor of the month in management circles. And like all fads, they come and go, with managers looking for the next “buzz” management strategy to implement. The recent product recalls plaguing Toyota, Johnson & Johnson, and even Ford Motor Company ironically demonstrates how yesterday’s number one strategic initiatives can fall by the way side. That’s why lessons should be learned from past and present product recalls and applied to LPO management.

LPOs Should Study History of Product Recalls
One could argue that the rash of product recalls across many industries stem from excessive cost cutting, trimming, right-sizing, etc. Lean management techniques have taken shape and evolved the business processes in place today in ways that probably have hurt more than helped. In the Johnson & Johnson pharmaceutical recall that was released just this past weekend, some of the reasons cited by the US Food and Drug Administration included, “Bacterial contamination, lax quality testing and inadequate training of workers.” Go figure – a lack of quality testing.

If an LPO firm were to experience the equivalent to one of these recalls, it would arguably put the company in ruins. It takes a costly media management effort to defend the fallout. In today’s hyper, social media environment, a few clicks could potentially turn the LPOs reputation upside down. Combating the negative press becomes a long term battle that only time can heal. Just ask Audi.

What ultimately hurts all of these companies, and what should not be overlooked by LPO, is the lack of foresight by management. By focusing on the immediate, short term cost savings, an adequate impact-analysis is not always weighed out and considered for the longer term.

LPO organizations
should keep the “Quality is Job 1” slogan in mind when approaching their business everyday, however it should not be sacrificed for the all-tempting Dollar, or Rupee, saved.


2 Responses to “LPOs Should Study History of Product Recalls”

  1. Henery on May 6th, 2010 3:21 pm

    Good blog but quality is important for any work you do to your customers. Why is it important in LPO? You mean to say that quality is not important to other jobs like BPO, RPO, KPO, etc?


  2. Sanket Purani on May 9th, 2010 8:32 pm

    Hi Henery – I believe keeping an eye on the quality of service is important for all types of outsourcing. My focus for the past two years has been on legal outsourcing, thus I’ve been voicing my thoughts in that particular area. I would suggest the same for the other areas as well.


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