Quality data reduces risk and cost for your businessBy John Wagner, AEM Director, Materials Management, and Michael Wurzman, President, RSJ Technical Consulting

(This is the 7th 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

Many AEM Advisor readers likely assume that there will be a substantial degree of market uncertainty in 2017, as the U.S. and other nations adjust to new policy directions following the recent election. 

But whatever the New Year brings, prudent companies have always pursued aggressive strategies to reduce their risks and their costs and will continue to do so.  In that regard, more and more firms are strengthening their requirement for higher-quality data from their supply chains, thereby reducing their risks and costs. 

Now, haven’t companies always focused on quality data from their suppliers? Yes, especially in regard to manufacturing specs and performance. What is more recent, however, is their focus on obtaining data that is increasingly complete and accurate in order to 1) mainstream their sustainability goals and, simultaneously, 2) comply with laws that target the toxicity in their products.

Achieving Sustainability Goals

In global terms, “sustainability” refers to the ability of major economies to maintain, if not improve, their standard of living at a time when water, minerals, forests and other resources are in ever-shortening supply.

In corporate terms, “sustainability” refers to the ability of forward-thinking companies to adjust to those global impacts and, in the process, to reduce a wide spectrum of risks and costs while improving profitability. To cite several examples:

Brand Risk

Virtually every OEM and large supplier is reducing its greenhouse gas emissions to head off “carbon-reduction” resolutions from shareholders and to avoid “name-and-shame” negative publicity from watchdog groups. 

Supply Risk

Some companies  are vertically integrating to assure a steady supply of “conflict minerals.” Others are ensuring a supply of materials and parts through their remanufacturing operations. Ikea is investing $1.1B Euros to maintain a long-term supply of virgin and recycled forestry materials that will boost its profits and its brand. 

Costs

Similarly, companies are using their sustainability goals to save millions of dollars annually in waste, energy, water, materials and other costs. These cost savings will cascade down the supply chain and provide long-term financial benefits to both suppliers and OEMs alike.

Complying with Global Toxicity Laws

Most AEM members are very familiar with REACH, RoHS, Prop 65 and other laws that – worst-case scenario – threaten their ability to place their products in major markets or create consumer lawsuit risks.

But here is the good news. The same attention to quality data that allows firms to meet their sustainability goals and, in the process, reduce their risks and costs, also serves them in meeting their legal and business requirements. While larger companies have a great deal of experience documenting greenhouse gasses and other facilities-level data, the documenting of complete and accurate substance data in products is needed to meet their toxicity-in-products requirements. This ability to collect quality substance data is 1) at the heart of AEM’s Market Access Pathway program and 2) a very important expansion of companies’ sustainability activities.

Summary

Increasingly, the business landscape requires AEM members and their suppliers to document complete and accurate data. While the types of data range widely from the concentrations of toxic substance content to the volumes of greenhouse gasses, there are several common threads amongst them. In particular, when it comes to meeting their sustainability goals and compliance requirements, the coming integration of these data sets allows companies to reduce risks, lower costs and generate new opportunities. 

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

 

 

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