Product Compliance Should Not Impede Innovation

Depending on severity, product compliance issues can cause all sorts of problems from run-away budgets to business closures. But effective policies and safeguards can create a strong foundation that promotes innovation rather than stifle it. The right solution for your business should foster productivity, market penetration and competitive advantage. If you’ve been putting off a systematic approach to product compliance, today’s increasingly regulated market has made now an important time to reconsider that decision, or indecision.

Why now?  No matter what industry, companies face a litany of worldwide and regional regulations that require proof of product compliance and environmental friendliness for market access. For many companies in several industries, complying with the changing Conflict Minerals Law is posing significant challenge. If you’d like to learn how many companies are eliminating Conflict Minerals from their products and supply chains, join this webcast on April 30, 2014 at 10:00 a.m. PT.

There are so many compliance mandates facing business, that 72% of CEOs in PwC’s 2014 Annual Global CEO Survey are concerned overregulation threatens their growth prospects. For example, Restriction of Hazardous Substances (RoHS) restricts the use of six dangerous materials used in the manufacture of electronic and electrical equipment.  ROHS was originally adopted by the European Union in 2003 for implementation in 2006, and it has evolved over time through various regional versions for North America, China, Japan, Korea, Norway and Turkey.  In addition, the RoHS directive allowed for certain exemptions which have expired, or will expire in the near future.  Additional regulations include the Battery Directive, Waste Electrical and Electronic Equipment (WEEE), and Registration, Evaluation, Authorization and Restriction of Chemicals (REACH) directives.  Additional evolving regulations are coming from governing bodies like the Food and Drug Administration (FDA) and the International Organization for Standardization (ISO).

Corporate sustainability initiatives are also gaining urgency and influencing product design. In a survey of 405 corporations in the Global 500 by Carbon Disclosure Project, co-written by PwC (CDP Global 500 Climate Change Report 2012 entitled Business Resilience in an Uncertain, Resource-Constrained World), 48% of the respondents indicated they saw potential to create new products and business services as a response to climate change. Just 21% reported a dedicated budget for the research. However, the report goes on to explain that those few companies are winning over new customers and driving additional profits by exploiting their abilities to adapt to environmental needs. The article cites Dell as an example – Dell has invested in research to develop new products designed to reduce its customers’ emissions by more than 10 million metric tons of CO2e per year. This reduction in emissions should save Dell’s customers over $1billion per year as a result! Over time we expect to see many additional companies prove that eco-design provides marketplace benefits through differentiation and direct customer value.

How do you meet compliance requirements and also successfully invest in eco-friendly designs? No doubt companies struggle to answer this question. After all, the journey to get there may involve transforming business models, go-to-market strategies, supply networks, quality assurance policies and compliance processes per the rapidly evolving global and regional directives. There may be limited executive focus on the initiative, inability to quantify noncompliance, or not enough resources to justify investment. To make things even more difficult to address, compliance responsibility can be a passionate topic within an organization, making the prospect of change on an enterprise scale problematic and time-consuming. Without a single source of truth for product data and without proper processes in place, ensuring product compliance burgeons into a crushing task that is potentially cost-prohibitive and overwhelming to an organization. With all the overhead, certain markets or demographics may become simply inaccessible. Therefore, the risk to customer perception and satisfaction, revenue, business continuity, and market potential is too great not to solve the compliance challenge. Companies are beginning to adapt and even thrive in today’s highly regulated and transparent environment by implementing systematic approaches to product compliance that are more than functional bandages but revenue-generating engines.

Consider partnering with Oracle to help you address your compliance needs. Many of the world’s most innovative leaders and pioneers are leveraging Oracle’s Agile Product Lifecycle Management (PLM) portfolio of enterprise applications to manage the product value chain, centralize product data, automate processes, and launch more eco-friendly products to market faster.   Particularly, the Agile Product Governance & Compliance (PG&C) solution provides out-of-the-box functionality to integrate actionable regulatory information into the enterprise product record from the ideation to the disposal/recycling phase. Agile PG&C makes it possible to efficiently manage compliance per corporate green initiatives as well as regional and global directives.

Options are critical, but so is ease-of-use. Anyone who’s grappled with compliance policy knows legal interpretation plays a major role in determining how an organization responds to regulation. Agile PG&C gives you the freedom to configure product compliance per your needs, while maintaining rigorous control over the product record in an easy-to-use interface that facilitates adoption efforts. It allows you to assign regulations as specifications for a part or BOM roll-up. Each specification has a threshold value that alerts you to a non-compliance issue if the threshold value is exceeded. Set however many regulations as specifications you need to make sure a product can be sold in your target countries. Another option is to implement like one of our leading consumer electronics customers and define your own “catch-all” specification to ensure compliance in all markets. You can give your suppliers secure access to enter their component data or integrate a third party’s data. With Agile PG&C you are able to design compliance earlier into your products to reduce cost and improve quality downstream when stakes are higher.

Agile PG&C is a comprehensive solution that makes product compliance more reliable and efficient. Throughout product lifecycles, use the solution to support full material disclosures, efficiently manage declarations with your suppliers, feed compliance data into a corrective action if a product must be changed, and swiftly satisfy audits by showing all due diligence tracked in one solution.

Given the compounding regulation and consumer focus on urgent environmental issues, now is the time to act. Implementing an enterprise, systematic approach to product compliance is a competitive investment. From the start, Agile Product Governance & Compliance enables companies to confidently design for compliance and sustainability, reduce the cost of compliance, minimize the risk of business interruption, deliver responsible products, and inspire new innovation.  Don’t wait any longer!

To find out more about Oracle helps companies comply with regulations, join our webcast on April 30, 2014 to see how it’s done with Conflict Minerals as an example. To discuss whether this is the right approach for your company, contact your sales representative, or call Oracle at 1-800-633-0738.

Many thanks to Shane Goodwin, Senior Manager, Oracle Agile PLM Product Management, for contributions to this article. 


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