SPF AMERICAS 2016 -Product Track_Product Compliance - Final

Enablon 2016 - ConfidentialEnablon 2016 - Confidential

SPF AMERICAS 2016October 5th, 2016

Enablon 2016 - Confidential

PRODUCT COMPLIANCE

ISSUES & TRENDS


9:30 AM – 10:10 AM ISSUES & TRENDSTracy Woo, Aberdeen GroupAlan Johnson, 3E Company

TODAY’S AGENDA

10:20 AM – 11:00 AM SOLUTION LIVE DEMOLeah Cartwright, Enablon

11:30 AM – 12:10 PM CUSTOMER CASE STUDYSpeaker Name

12:20 PM – 1:00 PM PRODUCT ROADMAP DISCUSSIONCaitlin Bergman, Enablon

2:00 PM – 4:30 PM TRAININGONE-ON-ONE MEETINGS


INTRODUCTION

Tracy WooProduct Innovation and Engineering (PIE)

& Manufacturing research

Alan L. JohnsonDirector of Strategic Partnerships

& Alliances


AGENDA

Current Product Compliance Challenges

Proactive Product Compliance

Implement Proactive Compliance


NAVIGATING PRODUCT COMPLIANCE


THE COMPLIANCE CHALLENGE

2 New Product Standards & Regulations

1Current Chemical

Regulations(REACH, GHS, etc.)

4 Supply Chain Visibility

3NGOs, Black Lists, & Social Media


INCREASED FOCUS ON COMPLIANCE

Concerns about high cost of avoidance (legislation, standards, liti-gation, insurance, etc.)

Reduce the risk of product recalls (non-compliance, customer returns, etc.)

Enable product sales in global markets

Need to respond to customer demand (e.g., customers demand products that are more eco-friendly, etc.)

Ensure compliance to current and future regulations (environmental, financial, etc.)

0% 10% 20% 30% 40% 50%

23%

33%

35%

43%

48%

All RespondentsPercentage of Respondents, n = 262

Source: Aberdeen Group


THE REGULATORY COMPLEXITY

• Companies struggle under the burden of spiraling global regulationsEver more demanding regulators and clients

Restricted/Banned Substances

• Consumer Products• REACH• ROHS• Phthalates/BPA

New Chemical Notification

• Taiwan Inventory• TSCA Reform

Classification and Labeling

• GHS • CLP• Cal Prop 65

Environmental Regulations

• Air• Water• Waste


NEW TYPES OF REGULATIONS

• Supply Chain TransparencyConflict Minerals (US)

• In 2010, President Obama signed the Dodd-Frank Consumer Protection Act into law. Section 1502 of that act addresses the international trade and use of Conflict Minerals

Modern Slavery Act (UK)• Requires businesses operating in the UK with a turnover of over £36

million to prepare and publish a “slavery and human trafficking statement” for each financial year


RISING GLOBAL REGULATION PRESSURES

Growing risks associated with non-compliance

Growing complexity of security regulations for international trade

Incomplete visibility or disparate systems.

Growing global operations causing rising process customization due to regional compliance

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

29%

32%

33%

47%

All RespondentsPercentage of Respondents, n = 151Source: Aberdeen Group


PROACTIVE COMPLIANCE


PROACTIVE COMPLIANCE

Monitor 1 Global Compliance Competitive Threats

Assess Risk 2 Chemical Risk Assessment Regulatory Trends Supply Chain

Strategize & Plan 3 Optimize Cost Supply Chain Brand Impact

Unify Internal Processes 4 Product Development Quality Compliance


BIGGEST PERCENTAGE OF COMPLIANCE COST

Hazardous waste

Process Safety

Energy

Product Safety

Employee Safety

Product Compliance

0% 10% 20% 30% 40% 50% 60%

23%

28%

33%

35%

43%

53%

All Respondents Percentage of Respondents, n = 262Source: Aberdeen Group


MONITOR






HOW TO STAY AHEAD

• Compliance StrategyStay ahead:

• Monitor for global industry trends and regulatory changes

http://www.safecosmetics.org/get-the-facts/


ANALYZE IMPACT PROACTIVELY

ANALYZEIMPACT


PROACTIVE COMPLIANCE STRATEGIES

Integrated regulatory content to automatically drive product as-sessments and documentation

Assessing / tracking of compliant suppliers

Established process to generate a roll up assessment of material composition of the entire product (bill of substances)

Procurement team establishes best practices for sourcing from compliant suppliers

Automated requests to supplier for material disclosure

0% 10% 20% 30% 40% 50% 60% 70%

51%

54%

60%

60%

65%

All RespondentsPercentage of Respondents, n = 262



ASSESS RISK






Similar Functionality

Substitute

CHEMICAL RISK ASSESSMENT•Toxicity•Eco-toxicityToxicology

•Regulatory listsRegulatory Content

•Classifications•Physical chemical

Chemical Attributes

•Organizational proprietary test dataProprietary Data

HAZA

RD

RISK ASSESSMENT

• Organizational exposure scenariosOrg. Data

• Exposure scenariosExposure DatabasesEXPO

SURE

SCORING & WEIGHTING ALGORITHMS


SUPPLY CHAIN ASSESSMENT


TREND ASSESSMENT

• Regulatory, Industry and Consumer


STRATEGIZE & PLAN



Strategize & Plan 3 Optimize Cost Supply Chain Brand impact



EMBEDDED PRODUCT COMPLIANCE

• Proactive Compliance throughout the product life cycle

Optimize Cost

• Early substitution• Recall reduction• Less re-development

R&D

Production Planning

Production

Purchasing

Quality ControlPackaging

Sales

Use

Recycling/Disposal


BUILDING SUPPLIER NETWORKS

• Forming collaborative relationships with your suppliers IncentivesRecognitionGamification

All 242 of Apple’s suppliers of tin,

tantalum, tungsten, or gold are now subject

to third-party audits to determine any links to armed groups in the

DRC.


MANAGE BRAND IMPACT

• Del Monte• Nestle• Ocean Spray

VS


ABERDEEN MATURITY CLASS FRAMEWORKSelected

Performance Criteria (KPI)*

Recordable Injury

Overall Equipment Effectiveness

Performance Against Corporate Plan AllRespondents

- Top 20%

Respondents are scored individually across KPI

Best-In-Class

% On-Time Audits

*percentage of products meeting these targets over the past two years

- Middle 50%

- Bottom 30%

Industry Average

Laggard


OPTIMIZE COMPLIANCE COST

On-time Audits Overall Equipment Effectiveness (OEE)0%

20%

40%

60%80%

100%120%

Best-in-Class Industry Average Laggards

Perc

enta

ge o

f Res

pond

ents

, n =

262

Sour

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Operating Margin v. Corporate

Plan

Product recalled in the past 12 months

-10%-5%0%5%

10%15%20%25%

Highest Percentage of Total Cost of Compliance

Best-in-Class Industry Average Laggard

4% 13% 24%


UNIFY INTERNAL PROCESSES






PROCESS SILOS

• Product Development, Quality, and Compliance ‘Siloed’ processesExecuted separatelyEach one resource intensive


INTEGRAL COMPLIANCE

• Building substance compliance into your product development processCompliance as a

complementary process to innovation

Compliance Check

Production

Sales & Distribution

Consumption

Disposal

R&D


SUCCESSFUL COMPLIANCE ACTIONS

Create / Improve collaboration across internal and external functional groups

Proactively monitor product designs for compliance

Consolidate product data from suppliers, partners, third parties, etc.

Create / Improve visibility into product data across the enterprise

Build compliance into the product design / new product development processes

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

23%

25%

35%

38%

43%

All RespondentsPercentage of All Respondents, n = 262



IMPLEMENTING PROACTIVE COMPLIANCE


IMPLEMENTING PROACTIVE COMPLIANCE

• Proactive Product Compliance Framework:Monitor new and changing regulatory requirements and industry

trendsAssess Risk related to the use of certain chemicals, regulatory

and market trends, and your supply chain Strategize and Plan to mitigate cost, create a more transparent

supply-chain and increase your brand equityUnify Processes and efficiently identify product and ingredient

compliance issues early in the product development cycle


BEST-IN-CLASS CAPABILITIES

0%10%20%30%40%50%60%70%80%90% Best-in-Class Industry Average Laggards

Perc

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, n =

187

Sour

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&Q A

SPF AMERICAS 2016 -Product Track_Product Compliance - Final

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