Keeping Good Product Records: A Manufacturer’s Primer

by Varnum LLP
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Are your product records a blessing or a scourge? Are they a core element of successful business operations, or a diversion of time and resources?  The answer depends on what records are kept, how they are compiled, and whether they are available when you need them.  Done well, corporate records systems promote business success, and tell the company’s story in the process. 

Why have a records program?  Company records programs fail for many reasons, frequently because the records are an afterthought and programs are inconsistently implemented.  As a result, the records leave many gaps, and may tell an inconsistent and incomplete story of your products.  Those gaps can come back to haunt you under many circumstances, including audits, shareholder reviews and litigation.  In those circumstances, others will often view the failure to have good records as an admission that the unreported activities either didn’t happen, or weren’t handled properly.

Good records programs start from a different perspective – what information will help us thrive and succeed as a business?  The records should be part of an integrated program which helps promote your business goals, and which tells the company’s story in the process. The company’s records program should be a core business function that helps ensure timely access to information by the people who need it, promotes focused, critical and innovative thinking within the company, and provides a framework for the consistent application of the company’s design, manufacturing and sales activities. 

What records do we need? 
There is no “one size fits all” answer to this question, because a well-designed records program reflects your business mission, goals and procedures. The program should be designed to promote the processes that will help your business succeed, rather than trying to fit your business into a generic, off-the-shelf program which may not accurately reflect how your company actually works.

There are, however, several key questions which should be answered in your company’s documents:

  • What product are you making?  As simple as it may seem, “defining” the product is very important.  Who is it for?  What will your customers use it for?  How will they use it?  These are among the key questions which need to be answered to successfully build and market your products.
  • What are the critical issues in designing the product?  Nearly all products have certain critical design issues which should be considered.  The records should reflect that the issues were, in fact, identified, and that the product was ultimately designed  consistent with that analysis. 
  • Was “real world” information considered in designing the product?  Information is often available from many sources which may be helpful in achieving a great design.  These include the obvious – governmental regulations and requirements, industry recommendations and guidelines, etc. – but should also include less obvious sources of information, such as the company’s warranty claims history,  customer experiences with similar products, and the experience of your competitors with similar products. 
  • Was the design tested?  While this seems obvious, the notion of testing often goes beyond engineering calculations and materials tests. Do you have prior experience with this (or similar designs) which may be helpful?  What happens when consumers actually use your products? 
  • Has this information been integrated into the entire design process?  This is a key concept in ensuring that the overall process is focused and efficient.  As you are mapping out, prototyping and testing the design, you should constantly be comparing it with your product “definition,” the information collected from your review of internal and external requirements and “real world” experiences, and the information gained through testing and evaluating the product.  Inherent in the design process is the goal of promoting your customer’s successful use of the product. In the marketplace, that may be what matters the most!
  • Are you building the same product that you designed? This is, of course, a huge question.  The company’s records should reflect an overall process of manufacturing and quality controls which ensure the consistency of the product that goes out the door.  Issues for consideration include the ease and consistency of manufacturing methods, making sure there is no “specification creep” in the materials and components being used, mid- and post-manufacturing quality control checks to ensure that critical components are being properly made, etc.
  • Have you considered the “real world” (part 2)?  Remember to follow the carpenter’s rule – “measure twice and cut once.”  So, let’s go back to one of the big questions again:  have you taken the steps needed to promote your customer’s successful use of the product?  Does the design continue to meet your product “definition.”  Is the design a good “fit” with your customers?  Is the product easy to use?  Have you provided good instructions, any needed warnings, etc.? 
  • Is there anything still bugging you?  If so, it’s probably also bugging someone else (or it will in the future).  Now is the time to address any remaining issues or concerns, and to document what you’ve done, before the product goes out the door.
  • Has the process been fully integrated (part 2)?  Hopefully, the answer is “yes.”  But it’s also important to make sure that the next steps – advertising and marketing the product – are also part of this integrated product, starting with the question of whether your advertising and marketing efforts reflect the product’s “definition.”
  • Are you keeping track of your customers’ experience with your product?  Your customers are, of course, the ultimate proving ground. Monitoring and using product information throughout the product’s life cycle is among the most important ways to keep your efforts focused on your customers’ needs. 

How long should I keep this stuff?
Given the difficulty of permanently disposing of information and records in the electronic age, the first priority should be to create the right documents and to make sure that information is available when you need it, rather than focusing on getting rid of old documents which are no longer relevant. There are many recommendations for how long various types of documents should be kept, and you should refer to your accountant, attorney and other advisors for recommendations applicable to your business.  In general, product manufacturers should make sure they maintain specific records for the full length of any periods mandated by statute or regulations (such as product recall periods), and that basic design specifications and records are kept for the anticipated useful life of the product.  If challenged in court, it’s always better to have a record of how you designed and built the product.

This sure seems complicated!
As with any manufacturing process, it takes work.  Many companies are already taking these steps, and a review and update of your document program is often a natural part of a continuing process improvement program.  The key to a good document program is that it should match how your company does business. As you review and evolve your document program, make sure it’s tailored to meet the critical goals of providing timely access to information,  promoting focused, critical and innovative thinking within the company, and providing a framework for the consistent application of the company’s design, manufacturing and sales activities.  Ultimately, a good document program should be a core tool in successfully running your business.

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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