Improving Supply Chain Compliance and Communication

Consumer packaged goods (CPG) companies must comply with a growing number of complex regulations aimed at protecting people and the environment against potential risks associated with chemicals.

A significant challenge that companies face in complying with the requirements established by these regulations, as well as with major brands’ and retailers’ chemical requirements, is communicating with suppliers to collect and manage complete, accurate and compliant chemical data.

Large companies and brands may not own the factories where their products are manufactured; instead, they work with a large network of manufacturers and suppliers. Therefore, effective communication with this network is paramount to maintain compliance and meet consumer demands.

Read our article to discover seven ways companies can help improve communication and chemical regulatory compliance across their supply chain.

Seven ways companies can help improve their supply chain’s communication and chemical compliance

1. Stay informed of regulatory changes

Proactively working to keep current on regulatory requirements and changes is a critical first step to improving chemical compliance communication across your supply chain. This can involve reading regulatory bodies’ newsletters, monitoring their websites, and attending relevant conferences and webinars. Companies also often benefit from third-party support to stay informed of regulatory updates.

UL Solutions offers services and software to help manufacturers navigate compliance with chemical regulations. Our chemical compliance software provides concise summaries of global regulatory requirements, authored and frequently updated by our global regulatory specialists, whose primary responsibility is monitoring and reporting on the regulations in their country.

2. Educate your supply chain

Your network of manufacturers and suppliers likely have varying levels of familiarity with chemical regulatory requirements. Smaller and less established suppliers may not be aware of some international regulations or retailer specifications and requirements that apply to your target markets. Therefore, providing suppliers with a high-level overview of requirements and the reason for your information request can help improve the likelihood of their response and the quality of the data they provide.

Beyond these initial efforts, consider providing ongoing education and support, such as through email newsletters and supplier training and workshops, to help further improve response rates and compliance. You can partner with a third-party organization, such as UL Solutions, to provide this education to external supply chain partners and other (sometimes nontechnical) internal stakeholders.

3. Communicate with consistency

Another key aspect of effective chemical compliance communication is consistency. This entails contacting your suppliers at a regular cadence — quarterly newsletters with information about updated regulatory and retailer requirements, annual requests for chemical compliance documentation renewal, and so on — and setting clear expectations for compliance data by using predictable documentation templates and frameworks with clear instructions for suppliers. Standardizing your communications enables suppliers to provide you with consistently high-quality chemical compliance information.

UL Solutions also offers software and services to help companies in these efforts. In addition to our training and advisory services, companies can use our software platforms to efficiently populate and send restricted substance compliance surveys and other documents.

4. Build strong relationships with suppliers

Chemical compliance requires a deep understanding your supply chain, accurate information about your products’ materials, ingredients and formulations, and suppliers’ cooperation in providing required documentation. Building long-lasting and strong relationships can help companies improve transparency and operational efficiency, as well as help reduce and stabilize prices. Additionally, reliable suppliers can often resolve supply chain disruptions more quickly by offering sourcing alternatives.

So how can you foster strong relationships with your suppliers? Rather than relying solely on less personal modes of communication — such as emailing or faxing compliance data requests with orders — consider calling your suppliers and talking through requests for compliance data with them when questions arise. Not only does this help to build a connection with your suppliers, but it also enables you to address questions and resolve issues more quickly. Also, regularly update your supplier contact information so you can reach the appropriate contact when questions and issues arise.

5. Evaluate your supply chain 

Your company ultimately will be held responsible for your products that are out of compliance with chemical regulatory requirements. Consequences of noncompliance include fines, delayed shipments, products being stopped at borders, additional testing, product recalls, and the resulting damage to your brand’s reputation. Therefore, you must work to understand the risks in your supply chain and mitigate those risks. Gathering information about your suppliers — including company size, capabilities, quality management processes, safety procedures, company leadership, recent organizational changes, internal job satisfaction and turnover rates — can help build a more complete picture of the risks they carry.

Assessing supplier risk related to chemical compliance entails reviewing your suppliers’ chemical data, including certificates of compliance, statements of conformity, and the name and job role of the person signing off on the data. If your suppliers are unwilling or unable to provide specifics on each chemical or raw material, you take on the risk for any compliance-related information missing due to unresponsive suppliers.

Identify your high-risk suppliers, which may include:

• Manufacturers of high-risk products, such as:
  • Food, which has higher risk of contamination and allergens
  • Children’s and juvenile products, which are more susceptible to product recalls and safety issues
• Manufacturers who have shown evidence of substandard business practices, including those that:
  • Have a history of failed tests or audits
  • Do not have incoming raw material programs
  • Inconsistently source their ingredients
• Suppliers with difficult-to-reach or non-compliant subcontractors

Identifying your high-risk suppliers and mitigating your supplier risk are not one-time efforts. Effective risk management policies and processes must be implemented regularly over time, from supplier onboarding until the end of their contract or project. 

6. Monitor suppliers’ testing and documentation

Managing supplier risk also requires companies to monitor suppliers’ ongoing performance and compliance. This includes spot-checking the product and ingredient testing information you receive from your suppliers to confirm they are meeting testing requirements. We also recommend periodically and randomly checking suppliers’ documentation to evaluate the quality and robustness of the information they produce.

Utilizing supply chain data collection software can support this effort by automating supplier surveys, which can help you to better monitor documentation. Having an independent third party such as UL Solutions collect the documentation often leads to higher-quality information. 

7. Enhance your supply chain communication and compliance efforts with chemical data management software

As you progress in your chemical compliance and product stewardship journey, you may find that traditional methods of collecting and monitoring supplier compliance data have their limitations. For example, when your company’s compliance information is contained in one employee’s email account, computer hard drive or password-protected folder, it can be challenging for colleagues to access the information — especially if there is a staffing change or if the information holder is on vacation or works in a different region of the world and time zone than the person who needs the information.

Traditional methods also require considerable manual upkeep, including searching through many emails, digital documents, and even faxes and other printed documents, and manually updating information in multiple places. Because the information is decentralized, it can be difficult to tell from a glance who hasn’t responded or provided complete information. 

Using chemical data management software can help companies streamline, modernize and optimize their compliance efforts. Such software can offer deeper insights into your supply chain’s chemical compliance and responsiveness to requests for compliance data and improve efficiencies for your company, thereby helping your company minimize the risks and costs associated with noncompliance and make informed decisions to optimize your supply chain.

UL Solutions chemical compliance management offerings do not end with our software; our dedicated team of 70+ global regulatory experts can support your restricted substance data management and compliance needs with our advisory, training, testing and certification services. Contact us to learn more.