Editor's Note
We wanted to mark the passing of Eddy D. Miller, president of CIMdata, on June 6, 2010. Miller had been with CIMdata since 1985 and had been a vigorous advocate for PLM in many venues, including the pages of Time Compression. We will miss him. We would like to express our sincere condolences to the Miller family and to the many friends around the world that he has left behind.
Managing Compliance
In recent years, manufacturers across all industries have had to contend with an expanding list of increasingly stringent and complex regulations governing issues such as health, safety, recyclability, and materials traceability. Complying with these regulations is now a fact of life in most industries, and the new business mantra is “comply or die” for a growing number of manufacturers.
Regulatory compliance generally applied mostly to pharmaceutical, food and beverage, medical devices, and aerospace companies—industries with governmental regulations requiring them to be able to identify the precise components or sources of materials/ingredients (e.g., in the case of an identified problem such as pharmaceutical side effects in patients, food recall, or an airliner accident). But considerable focus is now being made on environmental regulations and sustainability issues for companies in numerous industries around the world. Some of the toughest such regulations are in the European Union (EU), including the Restriction of Hazardous Substances (RoHS) and closely related Waste Electrical and Electronic Equipment (WEEE) directives. An even more detailed directive is Registration, Evaluation, Authorization and Restriction of Chemicals (REACH), an 849-page set of regulations described as the most complex in the history of the EU. End of Life Vehicle (ELV) is another “green” directive aimed at reducing the amount of waste from vehicles when they are finally scrapped. China, Japan, South Korea, and various other countries along with U.S. states are adopting many of these regulations and in some cases authoring similar ones.
Failing to comply with these regulations can be extremely costly in terms of fines, penalties, recalls, and negative publicity that can haunt a company for years and damage brand value. Products may be banned for sale in certain countries, even if a hazardous material threshold is exceeded on a single part such as a resistor, capacitor, or power cable. Also, delays in demonstrating compliance can slow or halt a product launch, potentially leaving products stacked in warehouses while forms are retrieved, material levels verified, and approvals sought. The impact to profitability can be staggering and long lasting.
Managing the Broad Scope of Compliance
Today, compliance embodies all of the environmental, sustainability, regulatory, reporting, and related tasks in industry. Understandably, complying with regulations is a matter of critical importance and concern for OEMs as well as suppliers in multiple industries. Managing compliance is a huge task, particularly for complex products with hundreds or even thousands of individual parts and assemblies. The major challenges with regulatory compliance are: security, process rigor, traceability and reporting, and keeping up-to-date with all the various regulations on a global basis. Compounding difficulties, requirements often vary from one region of the world to another. Given these complexities, manually researching, tracking, copying, verifying, updating, cross-checking, and reporting these massive amounts of data accurately and in an efficient, timely manner is impractical for many companies.
One of the greatest drawbacks with manual methods is time spent collecting and correlating information from many different sources throughout the extended enterprise, especially widely dispersed facilities and suppliers spread around the world. Moreover, verifying environmental compliance typically is a back-end process done near the end of development when making changes to designs is highly time-consuming and expensive.
In complying with increasingly strict governmental regulations, too much is at stake to rely on manual operations performed late in development. For a growing number of companies, Product Lifecycle Management (PLM) is becoming indispensable as their hub in compliance management, enabling organizations to compile, correlate, analyze, and report necessary information throughout the product development process, thus avoiding late-stage hurried activities trying to troubleshoot non-compliance problems, approval bottlenecks, and audit difficulties.
By giving people access to information when they need it in a form they can readily use, PLM serves as a unified conduit of data exchange and efficient workflow for a wide range of product-related processes, including compliance verification. Systems enable companies to connect globally dispersed groups—internal or external—so that people throughout the extended enterprise can work together in compiling and verifying regulatory compliance. Whereas PLM providers had targeted offerings for specific industries (e.g., pharmaceutical, food and beverage, medical devices, and aerospace) today they are developing preconfigured solutions that address specific compliance areas for an expanding range of industries, including automotive, defense, consumer products, electronic equipment, and industrial machinery. What’s more, a variety of compliance management solutions have been developed by independent software solution companies. Now the major comprehensive PLM solution suppliers are either establishing working relationships to satisfy these needs or developing solutions of their own. With a specialized PLM solution targeted toward compliance with particular regulations, users can readily check product content from a range of sources, including bills of materials, design specifications, and parts lists. This data can be cross-checked against applicable regulation requirements in the early stages of development.
Analytics and reporting capabilities generally found in PLM solutions are often used to determine and help communicate the status and results of regulatory compliance to appropriate individuals so that corporate risk is minimized. In such solutions, material content may be automatically analyzed against acceptable levels for individual components as well as the entire product. Compliance reports can be automatically generated to conform to appropriate governmental agency requirements as well as in specialized formats used by the company to track supplier compliance. Solutions also may provide comparative views, tabular listings, and analytic reports for substance use, threshold levels, recyclable content, and more.
The good news for the entire industrial community is that companies of all sizes in all industries can now utilize PLM in this manner to integrate regulatory compliance management into every phase of product development up-front rather than merely check it at the end of the process. With such an integrated approach, manufacturers streamline the process and avoid expensive late-stage changes as well as explore alternatives to improve designs while meeting compliance requirements. The value of these solutions is that companies can take a proactive approach to gain a significant competitive advantage now and in years to come by efficiently speeding products to market, avoiding the oppressive costs of non-compliance, and establishing themselves as leaders in concerns for consumer safety and environmental issues.
