This week, I had the opportunity to participate in a Top 40 distributor’s client roundtable event. This distributor clearly values compliance and went through the expense of bringing in a number of its very large corporate clients to specifically discuss the issue of product safety and compliance. Although education was provided and many notes were taken, I believe the greatest benefits of the event were the candid open dialogue between all the parties and the obvious spirit of collaboration that was evident as we discussed the best ways to ensure product safety and compliance solutions meet the needs of corporate America.
The message was clear: Fortune 1000 companies are fully aware of the need to protect their brands, and as such, they expect their distributor partners to deliver safe and compliant products. Many have experienced a product recall or corporate social responsibility issue, which required an enormous amount of time and effort to address but will never truly go away. These companies learned the hard way that once an event happens, it lives on in infamy on the Internet.
Thus, the question continues to be: What is the best way to approach this challenge? Unfortunately, there’s no easy answer.
Supply chain executives in these Fortune 1000 companies have repeatedly brought up one area of extreme frustration: the absence of a central repository for product-level compliance requirements. Where does one find product information and requirements? Naturally, the answer depends on the product.
For example, you may find direction in the Code of Federal Regulations (CFR), your product may have FDA requirements, and the chemicals in your product could be on a California Prop. 65 or hazardous substance list, or the product may be included in ASTM standards, to name a few. It gets even more complex if state attorney generals have determined state requirements for your products like some have started to do with BPA.
While it’s advantageous for our industry to offer a wide range of products, it cuts both ways. We have endless options to advance a Fortune 1000 brand, but we also have endless complexity when it comes to ensuring these items are safe and compliant.
Distributors that can help their customers navigate this difficulty are rapidly growing their value. While hard pressed to be an expert on every product they show and sell to customers, distributors do play an invaluably critical role in vetting the suppliers that provide these products. This is especially important when it comes to core competency. See what I mean in this previous blog post. More and more, savvy distributors are turning to those expert suppliers that have established core competencies and have the ability to meet the end buyers’ needs.
Fortune 1000 companies are trying to do the morally and legally correct thing in order to protect their brands, with some even outsourcing the management of their compliance programs. Although well intentioned and perhaps less expensive than having their own internal team of experts, these outsourced compliance programs often result in operationally centric processes with an over reliance on testing and auditing. The result is a compliance program that isn’t comprehensive, which leaves the door open for risk.
Instead, many are finding that partnering with the right distributor that is, in turn, partnering with the right suppliers and then making sure the proper checks and balances are in place is the best path. These Fortune 1000 companies are finding that a new level of collaboration is the key, and partnering with strength not only improves their compliance results, but it can also do so in a timely and cost effective manner.
Brent Stone is executive director – operations for Quality Certification Alliance (QCA), the promotional products industry’s only independent, not-for-profit organization dedicated to helping companies provide safe products. A Six Sigma Black Belt, Stone has more than 25 years of in-depth supply chain management experience with extensive expertise in process design, development, improvement and management. He can be reached at [email protected] or visit www.qcalliance.org for more information.
