What You Should Know About Product Liability

During my career in manufacturing, I've had the good fortune to work for both OEMs (original equipment manufacturers) and contract manufacturers that make things for others. One of the things I've had to deal with in both business models was ensuring products met the expectations of the end user or customer.
August 16, 2018 | Manufacturer
By: Michael S.
I have over 40 years experience in a broad range of manufacturing areas. Starting with an apprenticeship in Germany I’ve worked my way through a variety of positions within the manufacturing field. I got my start as a Tool and Die maker. I next became a supervisor of a class A tool room, then manager of a machining department. I was exposed to lean manufacturing in the mid 90s and adapted the lean philosophy. Loving and teaching the lean approach, I moved on to become a Continuous Improvement manager which led to a job as a manufacturing manager. I joined Acuity in 2015 as their manufacturing expert. I hope to evolve how manufacturers deal with and think about insurance companies, as well as be a resource to my fellow employees – enabling them to better understand the unique needs of manufacturers.

During my career in manufacturing, I've had the good fortune to work for both OEMs (original equipment manufacturers) and contract manufacturers that make things for others. One of the things I've had to deal with in both business models was ensuring products met the expectations of the end user or customer. One of our key concerns was the safety of the product, and we did a few things to ensure the product was delivered safely to the customer.

 

The first step is having a product design and safety team. The role of the product design team is to review each step during the design process. The product safety team’s responsibility is to ensure the product is as safe as it can be. Both teams should be made up of a cross-section of technical staff, engineering, manufacturing, marketing, and sales. Team members should have authority to intervene when needed and should be reporting to a C-level executive or equivalent. Some team members can be on both teams. However, additional non-technical team members should be added. 

 

The product review team’s role is to review the design for:

 

  • Manufacturability

  • Product reliability

    • Where and how is the product used?

    • Is the product designed to industry standards such as ANSI, ISO, SAE, AS9100? 

    • Establish a product testing procedure

    • Perform an FMEA (failure mode and effect analysis)

  • Material/component review

    • Ensure suppliers understand parts/material usage 

  • End user, operator concerns

    • Ensure that end users understand product intention

    • Good owner’s manual

  • Field install/maintenance

    • Ease of maintenance and serviceability

 

The product safety team’s role is to ensure the product is as safe as it can be.

 

  • Assure compliance with legal and regulatory requirements

  • Identify any potential hazards

    • What can go wrong with the product?

    • Identify and notify the design team of potential hazards

    • Provide solutions

  • Identify needed warnings

    • Ensure manual and labels are compliant with ANSI standard Z535.4

    • Identify labels and label placement

  • Identify potential safeguards

    • Covers, guards, dead man's switches, etc.

  • Identify potential misuse of product

    • Develop safety warnings against misuse

    • Identify potential design changes to prevent misuse

    • Develop potential safeguards against misuses

 

Before the product is released to manufacturing, additional steps should be taken:

 

Develop sound manufacturing processes

 

  • Understand product use and intention

  • Use industry standards and best practices to manufacture the product

  • Establish manufacturing specifications

  • Establish quality control processes                        

    • Use SPC (statistical process control)

    • Establish check frequency

    • Inspection sheets

    • Measurement methods, etc.

  • Ensure incoming components meet product specifications

  • Perform an FMEA for the process

  • Develop an ongoing product testing process

  • Establish audit procedures

 

The steps above are especially critical if you are a contract manufacturer, as you most likely were not involved in the design phase. 

 

During manufacturing

 

  • Ensure compliance with:                        

    • Quality control procedures and processes

    • Document all deviations 

    • Update manufacturing processes as needed

  • Ensure problems are addressed and resolved in a timely manner                        

    • Document:                                      

      • What caused the issues?

      • What was done to resolve the issues?

    • If you are a contract manufacturer, communicate issues and changes with the OEM and document those communications

  • Establish a closed loop system that communicates any product failure or issues with engineering, manufacturing, and design       

    • Field service and install

    • Customer service

    • Warranty claims

    • Distributors

 

If you have been in manufacturing for as long as I have, you most likely know that even when everything is done right, things can go wrong. Here are additional things you should have in place in case something with your product goes wrong.

 

  • A crisis communication plan:

    • Who are the key contact points within your organization?

    • How do you notify your customers?

    • How do you communicate issues?

    • How is the media managed and by whom?

  • Establish a product recall plan and process

  • Obtain product liability insurance (PLI)

 

Even if you are not an OEM, but a contract part manufacturer for others, you are not in the clear. Many purchase agreements hold the manufacturer of the actual part responsible if something goes wrong. Take the time and read your purchase orders and agreements. You may want to have legal counsel review them too. If they do not have a hold harmless clause in them, you can be held accountable and your business might be at risk. You can counter this by sending your own purchase agreement with a hold harmless clause to your customer. 

 

Most likely you have manufactured many parts and nothing has gone wrong. This can be due to good luck or it can be because you have sound manufacturing principles in place and follow the outlined steps above.

By: Michael S.
I have over 40 years experience in a broad range of manufacturing areas. Starting with an apprenticeship in Germany I’ve worked my way through a variety of positions within the manufacturing field. I got my start as a Tool and Die maker. I next became a supervisor of a class A tool room, then manager of a machining department. I was exposed to lean manufacturing in the mid 90s and adapted the lean philosophy. Loving and teaching the lean approach, I moved on to become a Continuous Improvement manager which led to a job as a manufacturing manager. I joined Acuity in 2015 as their manufacturing expert. I hope to evolve how manufacturers deal with and think about insurance companies, as well as be a resource to my fellow employees – enabling them to better understand the unique needs of manufacturers.