You cannot open a newspaper or read an article or even see a commercial on television today that does not have some kind of reference to the environment, sustainability and corporations wanting to be seen as ‘green’ and socially responsible.
Over the last few years, global legislation pertinent to the coatings sector has increased, and is now even more complex. This trend will certainly continue for the next few years as the European Union, American and Pacific Rim governments enact and enforce new legislation. It is becoming increasingly difficult for companies to sustain and grow their business within the boundaries of compliance.
The development of greener products by coatings manufacturers and formulators requires product compliance at each stage of the product life cycle. Catalyst legislations such as REACH and GHS, as well as customer demands, are re-defining what product compliance means, and as a result, it is an increasingly important factor in everything from materials procurement to completed product distribution. The alternative, noncompliance, generates substantial financial and safety risks, including inability to sell in global markets, unmet customer demands, delayed shipments, and the associated revenue loss throughout the entire supply chain.
Making Product Compliance a Green Strategic InitiativeMany companies begin adhering to legislation during market rollout, after a product is fully developed, only to learn that their product is not in compliance. This tactical and reactive approach limits an organization’s options and can be costly to remedy.
Designing for green products means checking for compliance early and often. Knowledge of legal constraints and obligations (lists of chemicals, hazard communication imperatives, registration and notification requirements, etc.) is a necessary component in all operations, including product lifecycle management (PLM), supply chain management, order management, sales and operations, as well as risk and compliance activities. It means integrating product compliance into business processes, best practices and in IT.
The coatings market faces unique challenges, including; faster innovation cycles due to customers’ ever-changing preferences for different colors, textures and finishes; an increased pressure to create more eco-friendly products such as products with low VOCs; indoor air quality issues; constant product formulation changes from new techniques; and chemical or regulatory restrictions.
Product compliance is a critical success factor for coatings manufacturers. Enthone is a Business Unit of Cookson Electronics, a division of Cookson Group plc. As a leading global supplier of high-performance specialty chemicals and coatings used in the electronics and surface finishing industries, Enthone manufactures, markets and distributes its functional, decorative and electronic processes that are used in printed wiring boards, semiconductor, automotive, aerospace, jewelry, hardware and plumbing applications.
“The challenge we have as a department is to be legally compliant – the law is the law – and we have the responsibility for Enthone to be fully compliant. Our customers expect us to be consistent and correct,” says Mr. Robert Coolen, Ing., a member of the Regulatory Environment Masterfile team at Enthone.
Let’s take a look at each step of the product life cycle and how product compliance can become part of the overall green business process.
Maximum Options, Minimal CostsProduct compliance within coatings is now not only very complicated but extremely costly. Regulations have become increasingly more stringent, and labeling has become critical as “green certified” and low VOCs are key product differentiators. Product stewardship and IT must be fostered to look forward, anticipate change and have a flexible vision.
Even when products are designed to be green, extensive regulatory compliance documentation and product traceability through the entire supply chain is essential. Information needs to be consolidated from multiple sources, new information must be generated and information must be shared across the supply chain. This presents complex IT and business process challenges to produce the necessary and accurate regulatory compliance documentation, as well as automate communication throughout the supply chain.
When product compliance is considered from the beginning, executives have better insight to risks such as revenue impact, product exemptions, supply chain exposure, inventory exposure and the useful life of a particular product. To mitigate corporate risk and have the maximum number of options at minimal cost, ‘Corporate Green’ begins with product compliance at each stage of the product life cycle.
Concept and Design - Rule-Based Compliance ScreeningIncorporating product compliance early in the product life cycle will help companies to design greener, eco-friendly products without increased cost or time to market by making sure they design with green chemical substances from the start.
Providing cross-organizational access to a vast and current knowledge base of regulatory information and product data (toxicological, ecotoxicological, physical properties etc.) standardizes the way product design teams gather and analyze compliance information across business divisions, product lines and geographically distributed teams. This also enables more organizational agility during the concept and design process.
At this stage, organizations need to identify any global regulatory constraints. Here all substances and mixtures are assessed, and appropriate labeling requirements are identified. Rule-based product compliance screening specific to the coatings industry helps organizations avoid costly last-minute reformulation or repackaging of products by understanding the regulatory business risks associated with material composition based on the intended use. For instance, it is necessary to screen ingredients and products for content on the HAPs List HAPs (also referred to as the CAA 112) as well as plan to produce necessary reports on HAPs content.
When product formulations change due to new formulation techniques, customer requirements or regulatory restrictions, organizations must be able to accommodate. Often, multiple coatings products have the same general characteristics and components. But a minor adjustment for a different shade or color can adversely affect product compliance and must be considered. Also, substance substitution calls for thorough compliance checking. Often, substitutions are required for a non eco-friendly substance that offers quick drying or ease of cleanup.
Finally, a detailed plan for disposal and end of product use should be created in order to ensure the smallest carbon footprint possible.
However, one of the biggest challenges facing organizations at this stage is that regulations, standards and chemical substance information are changing at an unprecedented rate due to GHS and REACH, among others.
Sourcing and Procurement - Supply Chain Communication and Chemical Approval ManagementOnce a product has been conceptualized and designed, organizations need to be able to source sustainable and compliant raw materials from suppliers. For each raw material sourced, important information on composition must be available to support regulatory requirements.
More specifically, REACH legislation requires that manufacturers and importers have a thorough knowledge of every substance used in the manufacture of an article or mixture. This means that the manufacturer needs to know whether their upstream suppliers have registered or intend to register any substance subject to REACH used in quantities over 1 ton.
Companies need to enable collaboration between procurement and regulatory teams by implementing product compliance-based purchasing workflow as well as continually monitor, assess and manage supplier risk. By leveraging a central collaboration portal, procurement organizations can gain tighter visibility over supplier and raw material data, and reduce operational costs by automating the process of capturing supplier information.
The reality of full material declaration by the supplier during the procurement process is that many suppliers are reluctant to disclose the information for a variety of reasons; the information is not readily available, volumes are low, the information is considered proprietary or they just don’t have the monetary or people resources to produce the information until a key customer demands it.
Pilots and Production - Rule-Based Document and Label GenerationDuring the pilot and initial production, extensive labeling and safety documentation needs to be developed before market rollout.
Coating products used in different contexts and markets such as industrial paints (car refinishes, coatings for electronic components) or paints for household use must have specific safety information, relevant to the context of use and user profile. This calls for use-specific safety documents.
It is important that all hazardous and controlled materials are identified for proper labeling. Using centralized regulatory content, each individual regulatory document is required to be harmonized across all geographic locations to preserve product branding and corporate identity standards. To ensure the safety of workers’ health and safety, documents need to be generated in local languages quickly and efficiently.
Market Rollout - Automated Document Publishing and DistributionMarket rollout includes the ability to generate supporting regulatory compliance documentation for products. With increased demand for public safety and public awareness of potential health, safety and environmental consequences, product documentation has become very thorough. This has placed an increased demand on manufacturers to provide accurate, detailed information about their products and the potential consequences of their products. There are many types of documents that need to be generated with country-specific requirements. Organizations with worldwide distribution channels must ensure regulations are met around the world prior to shipping.
Change Management - Supply Chain Communication and Volume TrackingMost companies today are part of an extensive global supply chain spanning across many industries and regions of the world. The reality of such an interdependent environment is that a company’s product compliance status is greatly impacted by other members in its supply chain. Once a product is introduced, the ability to track products through all stages of the supply chain becomes paramount. The key to an effective traceability system is good communication and management between the successive links in the supply chain.
REACH legislation is requiring manufacturers to understand the uses of their products so that appropriate exposure scenarios can be developed. Communication with downstream users is essential for understanding how and under what conditions products are being used. Over the next eight years as REACH becomes fully implemented, there will be a need for iterative communications both upstream and downstream.
Automating Product ComplianceImplementing compliance into the product life cycle is an ongoing process and not without bumps in the road. At the core of any product compliance solution is the regulatory content. Without accurate data and content, Corporate Green cannot be fully achieved. Every functional organization needs to incorporate and automate the same, centralized regulatory data and content throughout their various business processes to ensure consistent and efficient decision making.
In this new era of Corporate Green, the entire value chain is responsible for the compliance of substances, raw materials and finished products. Therefore, companies need to make product compliance a strategic initiative, to design in green products at the beginning of the product life cycle, plan for a green product retirement, and work with compliant supply chain partners. Sophisticated communication and traceability tools are essential to engage with supply chain partners as part of the extended compliance team.
Only when a company fully automates product compliance throughout the product life cycle and throughout the value chain can they achieve the next level of Corporate Green in their overall sustainability strategy.