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Shopping has never been easier. You only have to pick up a laptop or smartphone, tap on a few buttons, and products will arrive on the doorstep within a couple of days – and from the furthest corners of the globe. To consumers, the ease of the ordering process is entirely natural, but as manufacturers can attest, it is actually the result of a highly complex supply chain. This complexity is perhaps nowhere more apparent than when it comes to international compliance.
We all know that different states and trading blocs have their own rules and regulations about what can and cannot enter their territories. If a manufacturer’s products are not compliant with the regulations of a state then the customs and excise officers of that state will stop the products entering its territory. This is well understood.
If not tackled correctly, global regulatory burdens could well prove an insurmountable obstacle to the effective operation of international supply chains.
But what is less understood is exactly how much of an impact this can have on brands that are growing fast and looking to move rapidly into new markets. If not tackled correctly, global regulatory burdens could well prove an insurmountable obstacle to the effective operation of international supply chains.
The error that some brands make in meeting this challenge is to think of compliance solely in terms of the execution phase of the supply chain. While this is important, it seems clear to me that true global compliance – the sort that allows businesses to grow rapidly into any and all new markets – can only be achieved by embedding it into the supply chain from the outset. And this means ensuring compliance is thought of right from the product planning and design phases.
This is by no means an easy task. The FDA in the US, for example, mandates a Unique Device Identification (UDI) to adequately identify medical devices throughout their distribution and use. For manufacturers of such products UDIs must now be registered with the FDA as soon as a device is ready for production. This is, of course, just one regulation in one market – in fact any medical device manufacturer that wants scale must ensure that all similar regulations in all target markets are also complied with. Make no mistake: this is a mammoth task.
It is also worth mentioning that compliance is not only about gaining access to markets. Ultimately, compliance stems from a desire to protect people from harm; to manage any risks associated with products and services. As such, ensuring compliance relates to meeting customer expectations. Customers expect the goods they buy online to meet all relevant safety and, importantly, quality standards. If customers get hold of a product that fails to meet one or both of these standards, the effect on brand reputation can be disastrous – as Volkswagen is currently discovering as the fallout over its diesel emissions tests continues.
Compliance is not only about gaining access to markets. Ultimately, compliance stems from a desire to protect people from harm; to manage any risks associated with products and services.
It is therefore the manufacturer’s job to track the provenance of every component that goes into their products. After all, it is their brand capital that is on the line.
While the scale of the compliance challenge facing international online shippers is monumental, there are ways to make addressing them easier. From day one manufacturers should establish closed-loop, automated processes to manage quality and compliance within a unified enterprise product record. Drawing on modern Lifecycle Performance Management technologies manufacturers should look to automate compliance processes and enable the tracking of all materials used in production to ensure none are harmful or sourced from conflict zones.
Such an approach ensures manufacturers can retain an agile supply chain while protecting themselves from the reputational damage that ensues from a lack of compliance or a drop off in quality.