What is Product Compliance?

Jan 13, 2020 5:29:50 PM

Product Compliance

At the very simplest, product compliance means that your product meets all regulatory requirements that apply to it. Sounds simple, right?  But as many practitioners will tell you, compliance is harder than it seems on the surface.

First of all, regulations, standards and directives vary widely based on the type of product at hand, and they are constantly changing in different countries, states, and provinces.

This creates systems of rules that are essentially in flux at all times. This also means one has to make considerable effort into understanding which regulations apply, and when they may update.

Secondly, it all comes down to data. Data is the most basic currency in product compliance.

Proper product compliance hinges on evidence that a product meets the prescribed requirements.  That may involve testing, labeling, on-product disclosures, or certificates and seals of approval. 

Management of product compliance data and the processes around it, up and down the supply chain and into logistics and consumer realms, form the scaffolding for any compliance endeavor.  For complex products, the compliance footprint of any given item can span a dozen countries, hundreds of suppliers, and global markets.

As you might imagine, a well-run data ecosystem and organizational system saves staggering amounts time, reduces costs and enables companies to mitigate risks.

 

So, how do compliance teams work?

Generally, product compliance teams work to identify risks associated with products and supply chains. They know which regulations are related to design, production, logistics, and actual selling of goods.  They are also responsible for dealing with any market surveillance authorities in the case of non-compliance, often in tandem with legal.

The larger focus for most compliance teams is to reduce the risk to a company by making small adjustments to the product manufacturing and go-to market process. Failure to comply with regulations or standards often means heavy fines, closed markets, or restrictions on points of sale – all of which affects the bottom line.  That means that product compliance teams must be hyper-vigilant when it comes to managing supply chain partners, product data, and regulatory landscapes.

The exercise of inventorying the unique substances and materials in any given supply chain is resource intensive and often one that taxes compliance teams.

Keep in mind that there is a difference between quality control/assurance and product compliance. The former is typically focused at the SKU level, the latter at the market level.

 

What Standards do Product Compliance Teams Focus on?

A number of regulations and policies worldwide, like RoHS, California Prop 65 and EU REACH, restrict chemicals in manufactured products. Like many compliance regulations, these come with legal consequences.  As a result, adhering to them becomes a priority for product manufacturers looking to work globally.

 

Here are the general categories of regulations that product manufacturers keep a close eye on

 

Chemical Substance Regulations

There are many standards and directives relating to chemicals of concern and substances that can impact health and safety of people and environments. Lead, BPA, benzene, formaldehyde are just a few of the many substances that have significant regulatory requirements in the US.  Violations of these chemicals come with consequences, and so many compliance teams proactively test for them.

Regulations like California Prop 65 in the US and REACH in Europe have strict requirements stipulating these chemicals and can determine if a product goes to market in either region.

 

Product-Specific Safety Standards

Different categories of products have specific standards that apply to them. For example, there detailed standards for children’s toys, apparel, automotive, etc. and each has unique standards related to them.  Some items fall into more than one category. Many product safety standards require testing and documentation before going to market.

In the US, the Consumer Product Safety Commission (CPSC) maintains categories of product-specific safety standards, which are ever-evolving.

 

Labeling Requirements

There are a number of labeling requirements that exist worldwide, both for on-product as well as for shipping and transport. As you might imagine, regulations vary based geography, as well as product type.  One of the more well-known label standards is associated with California Prop 65.

As with product design, there is a chain of custody required to ensure that product data meets labeling and marketing teams efficiently, so a product hits shelves with the appropriate documentation and label.

 

Tools for Successful Product Compliance

Today, product compliance is a more expanded function than ever.

It may be the goal of the compliance team to determine a product’s compliance against multiple regulations without over-stressing the supply chain. But suppliers are at the front lines of the information management, IP protection, and communication needs when it comes to compliance. It often falls on them to gather the full chemical composition of an item to not only confirm safety and regulatory compliance, but to also proactively respond to emerging regulations and new chemicals of concern.

Technology has the ability to solve for supplier and organizational issues like redundancy of requests, proprietary substance protections, and submission to standards with tools like workflow automation, secure cloud services, comprehensive regulatory and hazard screening, and API integration.  If it is packaged in an intuitive, affordable interface, that increases engagement.

Companies can better manage risks in their data by automating the scanning and indexing of unstructured data like handwritten notes, excel sheets, PDFs, and PLMs. The proliferation of AI tools like machine learning helps take unstructured documents and fit the data into a standard BOM format that you can work with.

This pays dividends quickly.

Extracting data from documents and forms through manual data entry is slow and expensive, but is also prone to errors, which compounds compliance determination issues quickly. Accuracy and lower document processing costs are metrics which bolster any compliance team’s success.

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We know that consumers and forward-thinking brands are increasingly demanding cleaner, less harmful products and materials. And we get the very real challenges associated with product compliance. That is why we started Toxnot.

Our software looks at the specific pain points in product compliance and makes data – the ultimate currency in compliance- a resource, rather than a risk.

Want to know more about the standards and regulations that Toxnot can help you with? We screen products against over 50 regulatory lists, which are kept up to date so you can focus on what’s important. Our features like easy-to-use dashboards, auditable product histories, integrated reporting, automatic notifications when regulations change make compliance approachable for any organization. 

 


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