Quality data allows for a compliance value propositionBy John Wagner, AEM Director, Materials Management, and Michael Wurzman, President, RSJ Technical Consulting

(This is the 8th in a series of articles that assist AEM members in meeting today’s sustainability goals and compliance-reporting requirements; reducing financial risks; and generating financial opportunities from their sustainability and compliance activities.)

Background

Like virtually every company, your firm has very likely squandered a great deal of time and dollars trying to comply with REACH, RoHS, Prop 65 and all the other Extended Producer Responsibility (EPR) laws. Why? Because it is only very recently that there has been a comprehensive EPR-compliance solution; namely, the Regulatory Compliance Management Process (RCMP) that allows for the gradual accumulation of quality, i.e. accurate and complete, substance data that can be exchanged along a supply chain and documented for EPR compliance.

The fact that companies are now implementing the RCMP and collecting quality compliance data is a big story, because it allows them to turn compliance into a routine business process. The potentially bigger story, however, is that companies can leverage their compliance activities – in particular, their quality data - into a Compliance Value Proposition (CVP). Doing so, they can gradually reduce their EPR-compliance financial risks; lower their short-and-long-term compliance costs; generate new revenue; and achieve their corporate sustainability goals.

Given that the CVP is such a new way of thinking, below are a few examples to illustrate a few of its positive effects.

Reducing Financial Risks

From CA to China, every EPR law carries two related sets of financial risks, if your company has neither implemented an RCMP nor continuously improved the quality of its substance data.

First, if you have legal liability for products that you place on major markets, you may face fines, penalties, product recalls and/or market blockades that are associated with jurisdictional EPR laws.

Second, you may face the loss of contracts if you cannot provide quality data to your customers. This financial risk is very real if you are a mid-tier supplier selling to a customer. It is also true if you are a non-EU OEM exporting finished products into the EU, because your EU importers will hold you legally liable for those products and demand quality compliance data from you.

Lowering Financial Costs

Today, no manufacturing company would survive if it did not have an ISO 9001 or similar Quality process. The RCMP provides a similarly predictable structure for EPR-compliance activity that 1) minimizes data-collection, external consultant and other short-term compliance costs and 2) allows for longer-term compliance planning and cost control.

Furthermore, as your company collects more quality data, it is less vulnerable to costly fire drills, as governments enact new EPR laws, revise existing ones and/or introduce requirements for product-related greenhouse gasses, energy use and other data sets.

Generating New Revenue

In today’s compliance-heavy business landscape, quality substance data is “compliance gold.” Companies who acquire that data and incorporate it into their sales process have a major advantage over their competitors who do not. The data can also be used to achieve incremental revenue through strategic sourcing, marketing and brand promotion.

Achieving Corporate Sustainability Goals

Quality data can help companies to implement Circular Economy, Cradle-to-Cradle and Zero-Waste goals, as well as toxicity and recycling goals. It also allows them to leverage the data to implement (or expand) re-manufacturing, leasing, take-back and other programs that generate supplemental revenue at lower costs.

Summary

By implementing an RCMP and gradually collecting quality substance data, companies can turn their high-cost/low-value compliance approaches into a Compliance Value Proposition. The CVP reduces their financial risks; lower their compliance costs; generates new revenue; and assists them in achieving their corporate sustainability goals.

 

For More Information

For further information about how AEM and RSJ Technical can assist your company with designing and launching its RCMP, contact John Wagner, AEM director, materials management (jwagner@aem.org, tel: 414-298-4164).

Click on headlines below to read other articles in this series:

What's Needed to Achieve Quality Compliance Data? An Integrated Compliance Process

What’s Needed to Achieve Quality Data? Ubiquitous Training

To Achieve Quality Data, Collection Infrastructure Must Fit Needs

AEM's MAP Program: An Integrated Approach to Achieving Quality Data

Supply Chains Pose Obstacle to Quality Data

Chemicals in Products: The Next Big Risk for OEMs, Suppliers

How Quality Data Reduces Risk and Cost

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