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"Product safety" refers to the physical health and safety of persons with regards to non-food products, such as toys, household appliances, cars and cosmetics (http://ec.europa.eu/consumers/publications/prosafety_en.pdf, 2006). It is designed to minimize the number of injuries and fatalities caused by these products. Products in marketplace should not present any harmful design or hazardous material that could lead to injury and fatality on users.
Another definition of product safety is defined by Abbott's (1992). He suggested that product safety refers to the product which taking into account its characteristic and presentation that protect health and safety of persons (as cited in Siu & Wong, 2002). If the product does not provide standard of reasonable safety to the consumer would be considered as defective. Defective product is a product in a defective condition which produces and contributes injury to the users unreasonably (www.lectlaw.com., n.d.).
According to Weinstein, Twerski, Piehler and Donaher (1978) "...products must be designed for foreseeable use, not solely intended use." which means, once the functional aspects of a product are designed, a subjective, analytical process must begin. This process must articulate the types of use and misuse a product can suffer in the hands of all who may come in contact with it. Besides that, it must anticipate the hazards and risks of injury that are likely to be encountered by users. The product design must be reviewed and decisions made concerning which design alterations, warnings and instructions must be incorporated to minimize or eliminate the perceived risks of injury." Every single step could lead to an enormous impact on the final product. Even from the beginning of the product design, it also could fail to meet consumer expectations as to safety. Thus, manufacturer must understand that safety must be incorporated into a product from the very beginning of the product's design (Schedl & Winkelbauer, 2008).
2.0 Importance of Product Safety
2. 1 Manufacturer's perspective
Fairgrieve and Howells (2007) found that one who sells any hazardous product that could lead to safety and health problems to the user or consumer is subjected to liability for physical harm. Product liability is defined as a liability for damages due to a defect in the delivered product that could lead to life, body or property of another person is injured, the person who manufactured, processed, imported or put his name on the product as business is liable for damages of the injured person (http://www.tabunka.org/special/product.htm, n.d.). Under the negligence standard, manufacturers are liable for any product-related injuries due to their negligence if plaintiffs could prove that the product was defective (Gedde & Brahmasrene, 1999).
Furthermore, according to Liu, Kerr and Hobbs (2009) mentioned that consumer's trust for the particular product would be weakened due to the product safety incidents. Definition of trust is proposed by Mayer, Davis and Schoorman (1995, p. 712) "the willingness of a party to be vulnerable to the actions of other party based on the expectation that the other will perform particular action important to the trustor, irrespective of the ability to monitor or control that other party." From this point we could believe that trust is a significant factor that could alter the consumer buying behavior (Pennanen, 2009). For instance, consumer probably would lose confidence and trust for the particular product if he/she found any hazard when using the product. As a consequence, he/she may not purchase the product again in the future and likely spread negative word of mouth to other people.
Siomkos (1999) shows that entire organization's image may be negatively affected by selling hazardous product resulting negative effects on sales and may extend to other company's products. This brought over effect is also known as Halo effect. Therefore, when the reputation of organization is ruined, it is necessary for manufacturers to take immediate action which could re-build consumer trust in the market in order to continue the business successfully.
In fact, manufacturers must look after the products carefully before it launch to the market. It is simply because they are bounded by the product liability law which could lead to the consequences of the organization are involved with the legal action against it and cause a huge loss to the organization in terms of monetary and honorary.
2.2 Consumer's perspective
A study conducted by (Siu, N. E. M. & Wong, H. Y., 2002) shows that consumers consistently are represented as plaintiffs in products liability cases. That is, generally consumers would be the one whose experience the harmful product after using it. Those harmful products would incur either minor losses or tremendous losses to consumers' viewpoint.
There are two types of damages are commonly available, one is economic damages and another is non-economic damages (Savaiano & Hemingway, 2005). Economic damages refer to loss of earning, bills or other financial losses. Non-economic damages refer to pain and suffering, emotional distress and other physical or mentally harm (Savaiano et al., 2005). All of these damages are actually harm consumers in serious way. Consumers might lose their earning ability after using the defective product, for instance, a car owner loses his leg in an accident when driving a car with a defective brake system or they might suffer from the accidents caused by expired non-durable products, for example, milk produced with harmful chemical materials will cause infants to suffer or die.
Generally, consumers would think that product safety is one of the most significant factors must take into consideration when buying something. According to Savaiano et al. (2005) once the defective products have been found, recall or remediate would be a best choice for consumer to ensure that no more particular defective product in marketplace. Any hazardous product is not allowed to sell in marketplace which might cause even a minor injury or fatality. Therefore, this is the responsibility for manufacturers to guarantee unsafe products are not being sold to consumers.
3.0 Consumer Product Safety Commission
The Consumer Product Safety Commission (CPSC) is an independent federal agency that was established in 1972 under the Consumer Product Safety Act to regulate consumer products that pose any unreasonable risk of injury, to assist consumer in using product safely, and to promote research and investigation into product-related deaths, injuries, and illness (Nicholson, 1997, p.4). In fact, CPSC is a powerful federal agency that controls over the product standards. It could be a serious threat for manufacturers and sellers, but, it protects consumers from potential harm towards the usage of safety products. Besides that, it also works to recall hazardous products from the marketplace, and selectively conducts research in potentially hazardous products (http://www.inc.com/, n.d.).
CPSC tries hard to work closely with private consumer groups, industry, the media and agencies of different state and US government because it has authority to issue regulations that set up performance or labeling standards for consumer products. When referring to Consumer Product Safety Act, if a product violates a safety regulation or present a substantial hazard, CPSC may order a product recall, in which the item is removed from store shelves and consumer are alerted to return the item for repair, replacement or refund. Moreover, CPSC can also enforce penalties for violations of federal safety standards (Nicholson, 1997, p.5). Any suspected product will be examined by CPSC staffs to ensure there is no casualty with the designs and uses. In addition, CPSC also provide information to consumer on safety practices that can help to prevent product-related accidents (Nicholson, 1997, p.5).
Referring to Section 9 of Consumer Product Safety Act, the product and the nature of the risk of injury associated with the product needs to be identified. Submission of the information by invite any person that is not commission's members or the person interested needed. The Commission shall specify in the notice that which period shall not be less than 30 days or more than 60 days after the date of publication of the notice. Within 10 calendars days, the Commission shall transmit such notice to the appropriate Congressional committees. Any proposed consumer product safety rule shall be issues within 12 months after the date of publication of the notice. Within 60 days after publication, a proposed consumer product safety rule respecting a risk of injury related with a consumer product, the Commission shall publicize the particular rule. In the transmission of such a rule, the Commission shall consider and take into account the special needs of elderly and handicapped persons to determine the extent to which such persons may be adversely affected by such rule. Before publicize a consumer product safety rule, the Commission shall consider and make appropriate findings for inclusion in the rule. The Commission shall not promulgate a consumer product safety rule unless it has prepared on the basis of findings. Refer to Consumer Product Safety Act, Sec. 9. (g)(1), each consumer product safety rule shall specify the date such rule is to take effect not exceeding 180 days from the date promulgated.
4.0 Steps to Achieve the Product Safety Standard
To protect customers, reputation of the company and the product itself, it is essential to understand and fulfill with appropriate regulations and standards (DeRagon, 2009). It is essential for a company to achieve the product safety standards. If the product achieved the standards and the regulations, the consumers are protected and the company can maintain the good reputation.
4.1.1 Compliance with rules and regulations can guard against future claims
Small business and manufacturers have the responsibility to make sure that they produce or market only safe products (Thorson, n.d.). Products must fulfill certain guidelines and regulations to meet the safety standards of the U.S. Consumer Product Safety Commission (CPSC). There are few easy steps for the small business and manufacturers to accomplish, to make sure that the product is safe:-
Determine if your product is covered by the CPSC
Know CPSC mandatory standards and guidelines
Third party testing
Confirm the labeling requirement for the product
Keep current with the latest safety standards
4.1.2 Determine if product is covered by the CPSC
CPSC regulations cover approximately 15,000 types of consumer products used in home, in schools, and in recreation (http://www.standardsportal.org ,n.d.). Small business and manufacturers must get to know the CPSC guides and regulations. Consumer Product Safety Standard can be found in Consumer Product Safety Act. There will be a lot of regulations regarding to the Consumer Product Safety Standard written there.
4.1.3 Know CPSC's mandatory standards and guidelines
CPSC regulations covered approximately 15,000 types of consumer products, but some types of products are covered by others agencies (http://www.washingtonpost.com/, n.d.). CPSC administers six statues passed by Congress:-
Consumer Product Safety Act (CPSA)
Consumer Product Safety Improvement Act (CPSIA)
Federal Hazardous Substances Act (FHSA)
Flammable Fabrics Act (FFA)
Poison Prevention Packaging Act (PPPA)
Refrigerator Safety Act (RSA)
Understanding these rules would help small business and manufacturers to avoid problems before they market the product.
4.1.4 Third party testing
Determine if the product needs to have the third-party testing and get an approved testing lab (DeRagon, 2009). Distributors and suppliers are needed to verify that which products require third-party testing. The testing must be conducted by a laboratory recognized by CPSC (http://www.cpsc.gov/, 2009). After the testing of the product, generate a thorough product safety report. Confirm if any of the applicable standards and regulations is governed by CPSC (DeRagon, 2009).There is a need of a certificate which is called Certificate of Compliance; it is also name as General Conformity Certificate. It is required for all products.
4.1.5 Confirm the labeling requirement for the product
The tracking label information must be permanent, which will enable the manufacturer to find out the location and date of production of the product which include the batch number or other identifying characteristic. Hangtags and adhesive labels are not acceptable because it can be removed. (http://www.apparelsearch.com/, 2009)
The purpose of tracking labels helps to enhanced recall effectiveness. Tracking labels help the manufacturer target the problem and set off an effective corrective action program (DeRagon, 2009). Company must make sure label provide clear instructions for use on the label or elsewhere on the product, including all warnings (Thorson, n.d.).
4.1.6 Keep Current with the Latest Safety Standards
The requirements of product safety are changing constantly. No matters new products or old products, it must fulfill the product safety requirements from time to time. By reading current product safety news, getting updated with CPSC websites will keep you informed as to what is happening with the products which is similar to yours (Thorson, n.d). Besides CPSC, now there are additional websites that maintained by CPSC such as http://www.saferproducts.gov/, http://www.poolsafety.gov/, http://www.recalls.gov/, and http://www.atvsafety.gov/ for small business and manufacturer to have further information. In addition, the product safety issues should be up-to-date and be aware of the rules and regulation issues nationwide (Thorson, n.d.).
5.0 Implementation of Product Safety
The safety of the product is important to both manufacturers and consumers. By implementing product safety management into the organization, it reduces accidents, product recalls and insurance premiums. Increasing the safety and quality of products provides defensible product and company in the event of lawsuit, and minimizes the chance of punitive damages (Ross, n.d.).
Consumer Product Safety Commission (CPSC) has encouraged companies to implement active product safety management. Therefore, "Handbook for the Manufacturing of Safer Consumer Product" was published in June 1975 and revised in May 1977. The Handbook identifies the elements of comprehensive system approach to manufacturing safe products (www.cpsc.gov, 2006).
In August 2008, President Bush signed the law of Consumer Product Safety Improvement Act (CPSIA). This act was created to establish consumer product safety standards and other safety requirements for children products and to reauthorize and develop the Consumer Product Safety Commission. CPSIA regulations are intended to make products for children under age 12 safer by requiring manufacturers to show that these products do not have harmful levels of lead and phthalates (Corley, n.d.).
The safety of products is supremely important because there are organizations committed to product safety to ensure that dangerous products are not release to the public and warn about the possibilities of other dangerous product (www.product-safety.com, n.d.).
5.1 How Product Safety Protect Manufacturers
Other than to protect the consumers of certain products, product safety also protects manufacturers. Product safety refers to the production, distribution, and sale of products that from various perspectives are either potentially unsafe or inherently unsafe to consumer use (Knes, n.d.). The unsafe product can be defined as design defect, misrepresentation as to use, insufficient warning as to potential danger and hazard of the product. There are also community rules governing liability for defective products. In other words, if you have been harmed by a defective product, the producer, the importer and, in certain circumstances, the supplier may be liable for damage caused because the product did not offer the safety which may reasonably be expected. According to Larson (2003) "The goal of product liability laws is to help protect consumers from dangerous products..." therefore, product safety and product liability are inseparable.
Since product safety and product liability are inseparable, implementing product safety help manufacturers to avoid and prevent unnecessary legal matters, products recalls and also provide product safety information to consumers (www.insightu.org, n.d.). Product recalls would basically damage the good name of the company and it's not easy to gain back the trust from consumers.
There was a case which a consumer bought a bottle of Glug Cola from a convenience stall and decided to shake the bottle. Moments later, the bottle exploded, causing shards of glass to puncture the consumer's hand and face. The consumer had to stay in hospital for several days. After recovered, the consumer considered filing a product liability lawsuit against the manufacturers of Glug Cola. They argued that Glug Cola failed to warn consumers regarding the dangers of shaking their product before opening. Thus if Glug Cola had applied product safety requirements accordingly, it may prevent legal problems as in product liability claim (Pollick, n.d.).
Furthermore, product safety also acts as a confidence builder for consumers. When consumers shop for products, they would most certainly prefer a product that was proven safe and of good quality. This indirectly helps the product to promote itself and this is a method to gain consumers' brand trust. Hiscock (2001) quoted, "The ultimate goal of marketing is to generate an intense bond between the consumer and the brand, the main ingredient of this bond is trust." (as cited in Ballester, n.d.).
In understanding the consumer-brand relationship, it is of utmost importance that an analysis of the consumers' trust in the brand to be done. Trust is the most important attribute any brand can own (Bainbridge, 1997; Kamp, 1999; Smith, 2000). Therefore, trust is an important variable affecting human relationships at all levels (Rotter 1980). As concepts and theories from research on interpersonal relationships are used to characterize and evaluate consumer-brand relationships, trust should be analyzed as another facet of the bond between consumers and brands.
5.2 How Product Safety Protect Consumers
Factors that contribute to why a certain product is being categorized as unsafe includes design defects, misinterpretation as to use, or the absence of adequate warnings as to potential dangers and hazards of the product even when it is used as intended. Consumer protection is developed to assist consumers in evaluating the comparative safety of consumer product. Eventually, consumer protection gives consumers a better choice of goods, services, quality, reliability, safety and health. Other than that, it also acts as a guarantee to the consumers in terms of quality satisfaction and also the consumers' needs and wants.
As such, other than to protect the manufacturers, product safety's main purpose is to protect the consumers. It is irrelevant as to whether or not the manufacturer has exercised great care, if there is a defect in the product that causes harm, the company will be bounded with liability (www.legallawhelp.com, n.d.). Basically, liability and damages are the two essential elements in every defective products law case. Therefore, a law that helps protect manufacturers from law suits could also be used against them. Manufacturers have the duty of protecting consumers from potential hazards, even if the damage is primarily caused by consumer's carelessness or deliberate misuse (Pollick, n.d.). Besides that, consumers are entitled to damages for pain and suffering experienced. If the consumers are married couples and the injury has affected the relationship between them, they may be entitled to claim to the loss of consortium damages even if the spouse was not directly injured by the product (www.thecorner4women.com, n.d.).
Other than to obtain compensations for the victims of unsafe products, it could also result in product recalls or removal of defective products, preventing future injuries. (Cada, Frocheiser, Cada & Hoffman, n.d.). The product recall or removal of defective products helps prevent injuries by returning all the products that already in the market back to manufacturer.
Product safety also ensures that products should come with safety labeling because it is one of the requirement of Consumer Product Safety Commission (CPSC). The reason to provide labeling is to help protect consumers from unreasonable risks of serious injury from potential dangerous product (Derby. A, 2010). The product safety label serve to inform users of the product name, content, price and other relevant information to help them make choices on the product to purchase. The important part of the product safety labeling is to guide consumer how to use such products, how to store it and what dangers to avoid. For example, flammable liquid should be kept out of reach from minors.
6.0 Challenges of Product Safety
6.1 Product hazards
A product hazard is a source of danger that might harm people, environment and financial and material assets (Rausand & Utne, 2009). According to Macdonald (2004) product risk can be measured either in quantitative or qualitative method (as cited in Rausand et at., 2009). In order to eliminate and control the consequences that lead by the hazards, standards and guidelines that stated in ISO 14121-1 and IEC 60300-3-9 serve as a basis for risk assessment and analysis (Rausand et al., 2009).
Possible effects of hazardous product can be happened in short-term or long-term period for both manufacturer and consumer. For users, short-term effects could be simple as injuries or hurts that cause by after using a hazardous product and long-term effects could be cancer or fatalities that cause by toxic materials or radiation. However, the effects are not necessarily caused by the product; it might be caused by the method or the way a user using it. According to Back and Wang (2007) a high number of traffic accidents caused by the use of hand phone while they were driving (as cited in Rausand et al., 2009). For producers, possible effects that caused by harmful or hazardous products are payment for settlement of injuries, death claims or warranty cost, market share loss (Rausand et al., 2009) or even a bankruptcy. Nevertheless, producers need to embrace the cost of these effects since it is impossible to produce a zero hazardousness product.
However, there is a problematic hazard when analyzing a product risk, that is the manner or the way the user uses the product and determine of a product use. It could be a vast difference whether a user misuse the product without referring to the product descriptions or misuse the product due to the misleading product descriptions (Reinert, Brun & Flaspoler, 2007).
According to Rausand et al. (2009) the first thing that must be considered in order to reduce the risk are the requirements in laws, regulations and standards. A safe product is needed to be assuring when it is placed on the market. If a company has failed to meet the requirements, CPSC will take action and order the company to recall its hazardous products (Leone & Berger, 2009). Therefore, the assessment of adequate safety must be updated in the product development process. Besides that, the recommendations in guidelines on product safety are needed and must be clearly declared (Rausand et al., 2009). It is not possible that a company can totally eliminate all the risks from a product because there are some certain natures or functions of a product would have some inherent risks or hazards. For example, a knife. The only way to reduce the risk is to design it with a knife cover and state out the uses of this product. Thus, a proper description and recommendation for every product is very important in order to reduce the risks to minimum.
Moreover, a safety-oriented product development is required to enhance the product safety and it must be consider the three following aspects of the system in place (Redmill & Anderson, 2008). Methodology is very important because it needs to be in touch with the latest development in the field and sticking with the safety requirements to enhance the product safety. Motivation of the employees is needed to encourage the productivity. It is probably futile if there is no commitment from the employees.
Lastly, the safety-oriented mind-set is the core because every employee represented every single step in the production process that affecting the product safety. Therefore, a safety-oriented mind-set must be firstly delivered to the employees in a company.
7.0 Summary of the Case Study
After launching the product (nursing pillows) for 5 years, Boston Billows received a letter from their largest competitor, Boppy Company regarding the risk of poly-bead in its pillows. Months later, another letter came from Consumer Product Safety Commission (CPSC), the U.S. government agency charged with ensuring the safety of consumer products. It was deemed unsafe for the use with infants and Boston Billows was forced to recall all the pillows that the company sold. The main reason was the death of 35 infants deaths associated with the use of infant cushions/pillows (Stevenson, 2006). However, scientists were unable to determine the causes of the infants' deaths. Nevertheless, it still leads to the ban of mattresses in 1992 by CPSC.
Investigators of Boston Billows' decided the recall ruling that has threatened to put Boston Billows out of business for good. Skoug and Igoe were not satisfied with the recall ruling because the comparison between the 2 products was unfair as one is a mattress and the other is a pillow.
Therefore, both founders flew to CPSC headquarters in hoping to change their minds and it lead to few more unproductive meetings and decisions, for example, redesigning and even to the extent of convincing higher officials from state of New Hampshire to make calls and write letters on behalf of Boston Billows. Despite it, CPSC did nothing to lift the ban.
Skoug and Igoe suffered massive losses to make sure the company survives by firing their employees and even cancelling their UPS account as they were waiting for the respond of their final request to reverse the banning decision. They were not able to cope as revenues have shrunk from $ 750,000 to less than $15,000 (Overfelt, 2006).
8.1.1 Evaluate the steps that Skoug and Igoe took to battle the CPSC's recall ruling. Should they have done anything differently?
Firstly, Skoug and Igoe flew to CPCS's agency hoping to convince CPSC officials to change their mind by withdrawing the recall order. However the meeting was unproductive. The CPSC later forced them to make unnecessary modification without any advice on how to do so.
This was clearly a mistake that both of them have made in their 1st step. They should have consulted the Board of Lactation Consultant to view this matter with their support as they are the experts on how beneficial Boston Billows' nursing pillow is.
As Boston Billows lack money to engage in an extended legal battle with CPSC, Skoug and Igoe took the second step which was issuing a recall of their products. Boston Billows spent $10,000 to contact retailers, issuing funds and writing letters to customers.
It was a necessary step as their product was suspected to be hazardous. A standard procedure must be adhered to or else no one will abide if it happens to other products. For example, the tainted milk scandal that happened mainly in China, 2008. If product recall was not issued, many infants would have suffered death by now.
For their 3rd step that they took, Skoug and Igoe tried to convince them in the next 18 months by modifying the nursing pillow to be smaller and more compact. Sadly, the agency ignored the redesigned version of pillow.
Skoug and Igoe should have ensured the necessary modifications before doing so. Clarification is important as their company is already suffering huge losses from the product recall. Besides that, since Boston Billows are confident with their proven facts that their product is safe, they should battle out as compensation money might have covered the costs of it.
Moreover in latter period, both of them even convinced Senator John Sununu and Congressman Judd Gregg, both from the state of New Hampshire, to write letters and make phone calls to CPSC on behalf of CPSC. Eventually, a meeting was held with the head of CPSC and seven CPSC lawyers. Decision remained stagnant no matter what testimony from experts that Skoug and Igoe presented.
Apart from urging the senators to write letters and make phone calls, it might even be better if the Senator and Congressman pressures CPSC for the results whether to lift the ban on Boston Billows' nursing pillows.
Fallen into deaf ears, both founders resorted to their final option which was filing official documents with the CPSC requesting the agency to reverse its decision.
This was their biggest mistake as they should have done this in the 1st place. They could have preserved at least 2 years of losses instead of 4 years.
Needless to say, as their company was facing financial difficulties since their main product is nursing pillow; all Boston Billows' employees were laid off in order to sustain the company from bankruptcy.
There wasn't any other choice they could pursue as they have almost reached the brink of bankruptcy. It was indeed necessary to maintain the future of the company. Nevertheless, it was impressive that Boston Billows managed to survive till 2008 until the ban was lifted. Small business companies normally would not stand a chance to survive once product recalls have been issued as they do not have the capital to sustain their companies.
8.1.2 What do you forecast for Boston Billows' future? Work with a group of your
classmates to identify other options that Skoug and Igoe could pursue with their company.
As for Boston Billows' future, the image of the company has been tarnished by CPSC because of CPSC's unsupported facts and bureaucracy in their agency that delay and ignorance of Boston Billows' countless pleas. Therefore, gaining back the trust from consumers is considered their main objective. However, Boston Billows will improve by sealing the loopholes to prevent a second wave of unscrupulous claims by competitors and CPSC that might lead to product recall again.
To justify the goodwill and trust of Boston Billow for public
After 4 years of contesting with CPSC to uplift the ban, Boston Billows' battle finally paid off in 2008. In light of the ongoing risks posed by infant cushions/pillows when used in the sleep environment, the Commission finds no justification for repealing the ban on infant cushions/pillows at this time. Thus, the Commission is terminating the rulemaking on infant cushions/pillows or pillow-like products (Stevenson, 2008). Therefore, Erik Skoug and Ken Igoe should try and collaborate with similar companies that were facing the banning of polybead nursing pillows to seek compensation. Boston Billow had suffered huge losses due to the unproven facts by CPSC that almost lead to the closedown of the company. Though CPSC stood up for the rights of product safety for the infants, they should make a public apology to justify the defamation of Boston Billow's goodwill. It is only fair as this is the best way to gain back the confidence from consumers of Boston Billows
Educating parents about the benefits of polybead compared to other filling
Boston Billows should collaborate with hospitals and International Lactation Consultant Association (ILCA) to educate parents about the benefit of polybead nursing pillows as it helps to save lives especially the premature ones (Overfelt, 2006). According to Diane Disandro, who has been a lactation consultant for 25 years who is based in Audubon, says, "Boston Billows [pillows] provides more support under the baby's than competing pillows. It holds shape. There's nothing else out there that does that (Overfelt, 2006). Nurses in the hospital must educate the parents that during breastfeeding or bottle feeding the infant, support for their fragile head is much needed and Boston Billows' nursing pillow suits the best especially the 1st timers. Parents would not have to support their child's head with their arms as this could cause discomfort. Parents who understand the benefits of polybead nursing pillows will spread it through word-of-mouth to their friends.