MetricStream solution provides a common system to manage product quality and safety regulations, communicate requirements to suppliers, capture and analyze testing and compliance data, and proactively address issuesDownload a Solution Brief
Protect Your Brand and Your Consumers: Strengthen Product Quality, Safety, and Compliance through a Streamlined, Integrated Approach
Major Regulations for Product Quality and Safety
REACH (Registration, Evaluation, Authorization, and Restriction of Chemicals)
Retail and Consumer Product Goods (CPG) companies have always been committed to selling high quality products. Yet over the last decade or so, the growing globalization and complexity of the supply chain, as well as the pressure on companies to quickly bring new products to the market, have created a number of product safety and quality issues. These issues have manifested in numerous product recalls which have shaken consumers' trust in the ability of companies to make safe and effective products.
The year 2007 was a kind of tipping point. Widely dubbed "The Year of the Recall," 2007 saw millions of consumer products, including toys, cribs, heaters, ovens, and jewelry being recalled for defective or harmful components. Many of these products had been manufactured by trusted brands.
Since then, consumers, regulators, and the government have demanded stricter measures to monitor product quality and safety - especially in the supply chain - and keep dangerous products off shelves. Multiple regulations have been introduced across countries to keep quality issues in check.
Meanwhile, consumers are taking to blogs, social networks, and online review sites to post their complaints about product issues. Many of these complaints are re-posted by thousands of other people across the world, putting the brand's reputation in jeopardy.
Alongside, media reports and NGO campaigns on product issues are now reaching a global audience. Whether their claims are true or exaggerated, multiple people are listening.
In response, retail and CPG companies are fast realizing the need to step up their product quality, safety, and compliance programs in their supply chain. If they don't, they might find themselves at the receiving end of costly product recalls, law suits, lost sales, and reputational damage. Even if a supplier or sub-supplier is to blame for a defective product, ultimately the company who hired them is held responsible.
Where Do the Challenges Arise?
Despite the best efforts of retail and CPG companies, it is far from easy to manage product quality, safety, and compliance in a sustainable manner. Here are some of the challenges that companies face:
Varying regulatory requirements: The regulatory environment around product quality and safety is continuously changing as new laws are introduced or existing ones are updated every so often. Compounding the challenge, laws and regulations differ from one product segment to the next, from one demographic group to the next, and from one country to the next. This complicates compliance management and monitoring especially for companies with global operations and suppliers.
Complex supply chain: The supply chain has become a vast multi-layered ecosystem with each company having numerous suppliers scattered across different geographies. Each of these suppliers, in turn, has its own sub-suppliers or sub-contractors. For the company right at the top of this hierarchy, it is becoming increasingly difficult to gain visibility into this complex ecosystem, and facilitate accountability for any product quality issues that arise.
Limited collaboration, costly duplication of effort: Many companies adopt a "siloed" approach to product quality, safety, and compliance management. Collaboration and co-ordination across departments and suppliers is limited. For instance, the product quality department may manage its audits separately from those of the compliance department or the supplier management department. But at some point, the efforts of all three departments will overlap since they are all dealing with the same suppliers. This duplication of effort wastes time and resources. It also leads to supplier fatigue as the suppliers frequently have to face different groups of auditors from the same company.
Building a Robust Product Quality, Safety, and Compliance Program
At every stage of the product lifecycle in the supply chain, companies need to integrate product quality, safety, and compliance mechanisms. These include:
Comprehensive quality policies: Robust policies help suppliers, employees, and other stakeholders understand a company's "Do's" and "Don'ts" for quality, safety, and compliance. Senior management must set the tone for the rest of the company by participating in policy development, and supporting it at every stage. Comprehensive training and refresher courses are also essential to help spread awareness and education about the policies across the company as well as the supply chain.
Well-defined risk appetite and frequent risk assessments: In addition to policy development, senior management needs to identify the company's risks and risk tolerance levels at each stage of the product lifecycle. This, coupled with regular risk analyses, helps companies proactively track if risk thresholds are being breached at any stage of production or distribution in the supply chain. These issues can then be investigated and mitigated in a timely manner.
Efficient supplier management: Since many of the product quality issues arise in the supply chain, a robust supplier screening process helps companies zero in on suppliers that they can trust. Maintaining a comprehensive supplier database helps companies become aware of, for instance, what aspect of production Supplier A is responsible for, and who its sub-suppliers are. This information is critical in tracking product quality or safety issues back to the source.
Thorough understanding of product specifications: At different points in the product lifecycle, product samples must be tested against pre-defined product specifications - such as expected functions, geographic markets, labeling, product lifespan, and packaging. Beforehand, these specifications should be communicated to suppliers as well as third-party testing labs so that they know what is acceptable and what isn't. All these different specifications also have a regulatory compliance bearing. For instance, product labels in the U.S. have to be in compliance with FPLA mandates. Children's products have additional labeling requirements and warnings.
Frequent testing: When it comes to product testing, companies can opt for either an in-house testing lab or a third-party testing lab depending on regulatory requirements. Some countries mandate third-party testing at the pre-distribution stage. Whatever companies decide, they must ensure that the product is tested not only against pre-defined specifications, but also against Restricted Substances Lists (RSLs) to determine if the product contains any harmful components.
Effective remediation: If a product fails a test, a robust issue management process helps identify the root cause of failure, and implement corrective action - be it reworking the product or destroying it. Alongside, preventive action such as product design revisions or material replacement helps ensure that product failures don't recur.
Regular supplier audits: Each supplier needs to be audited at regular intervals to determine the effectiveness of their quality and safety controls, and monitor their compliance to company policies and regulations. For a large supply chain, a risk-based audit approach is a good idea as it enables companies to direct their audit resources and costs towards high-risk suppliers instead of trying to audit all suppliers at once. If quality, safety, or compliance issues are identified during the audit, companies must take the time and effort to work closely with their suppliers to implement the appropriate corrective action.
Continuous supplier collaboration: The key to maintaining product quality throughout the supply chain is collaboration. Companies must actively and constantly communicate with their suppliers as well as their testing labs, and make them aware of the company's policies, compliance requirements, test plans and thresholds, and safety standards. This helps the suppliers and testing labs stay alert to product quality or safety issues, and proactively remediate them.
Proper documentation and tracking: At every step of the way, it is critical to maintain documentation on testing plans, test results, corrective action, and all other activities and decisions. It is also important to track the product as it moves through the supply chain, from production to distribution. This helps companies proactively identify and quarantine defective or non-compliant products.
Ongoing monitoring of post-sales and disposal: Companies should also have a quality and compliance program for the post sales stage. This helps them "listen" to customers (e.g. on social media), address and investigate customer complaints, and implement corrective and preventive action in a timely manner. A post sales compliance program also helps companies dispose of products effectively or recycle them in compliance with environmental regulations.
How MetricStream Can Help
MetricStream offers a comprehensive solution to help retail and CPG companies enhance product quality, safety, and compliance. Built on a flexible GRC platform, the solution brings together the company, its suppliers, testing labs, and compliance monitors in a centralized framework. In doing so, it facilitates seamless collaboration within this ecosystem for the purpose of preventing product quality, safety, or compliance issues. The solution also consolidates and streamlines end-to-end quality and compliance management processes, and provides complete and real-time transparency into these processes through powerful dashboards and reporting tools. The solution provides a number of capabilities, including:
Supplier/ Vendor Information Management
Through a common repository, the solution helps companies store, manage, and easily access information on all suppliers, sub-suppliers, factories, product testing labs, liaison offices, and other entities. The solution also streamlines supplier management processes - right from supplier on-boarding, to annual re-qualification processes, and contract management. Various contracts can be stored in a tree-like structure with linkages to the appropriate supplier. Each contract can be tracked and monitored from origin to obsolescence through advanced analytics and reporting capabilities. The solution also provides a Web-based interface that allows suppliers to manage and update their own profile.
Product Information Management
The MetricStream solution provides a central framework to store and manage product specifications including SKU number, materials, components, finished goods, and associated vendor facilities. It also provides functionalities to efficiently communicate with suppliers on material and component requirements, as well as product specifications and tolerance levels. Companies can create, send out, and manage self-assessments and questionnaires for suppliers through the solution.
RSL List Management
The MetricStream solution enables companies to create and manage both internally developed and third-party RSLs and Declarable Substances Lists (DSLs). It helps users easily search and access the maximum recommended levels of known hazardous substances. The underlying data model helps in maintaining a many-to-many relationship between the components, materials, and products, thereby enabling users to understand all the products impacted by a specific substance. The solution also supports guidelines for suppliers to document substances in their products, in compliance with health and environmental standards.
The MetricStream solution provides a flexible framework to streamline the development, management, and communication of various quality and safety policies and procedures across the enterprise. Integrated collaboration and workflow tools can be used to access, create, modify, review, and approve policy and procedure documents globally in a controlled manner. Built-in tools support policy implementation, acceptance, exception tracking and mapping of policies to compliance requirements. A centralized, Web-based repository helps store and organize policy and procedure documents, and provides easy search and access capabilities.
Throughout product design and production, the MetricStream solution enables companies to design and conduct hazard risk analyses and failure mode analyses in order to proactively identify and mitigate product quality risks. Powerful risk heat maps and risk calculators help assess, rate, and prioritize risks such as non-compliance risks and consumer safety hazard risks. Based on these risk ratings, companies are well-positioned to conduct risk-based audits and lab tests, and efficiently direct maximum resources to address high risk areas. All risk details are stored in a centralized risk library, thus helping establish a common risk vocabulary across the enterprise.
The MetricStream solution provides a single framework to create product test plans and manage each stage of testing. The solution also integrates with testing labs to import findings and results across the entire testing lifecycle - right from raw materials and components testing, to finished goods testing and beyond. A central database provides testing information on product properties (e.g. physical, chemical, environmental), product specifications (e.g. fitness, strength), product attributes (e.g. style, color, size) and product regulatory compliance (e.g. hazardous / restricted substances). The solution also helps in routing non-conformance findings, which have been detected during the testing process, through corrective/ preventive action processes.
Quality Inspections/ Audit Management
The MetricStream solution provide capabilities to manage internal quality audits, supplier audits, and external or third-party audits and inspections to determine if quality requirements are being followed. Advanced inbuilt capabilities help efficiently plan and schedule the audits, conduct fieldwork based on audit checklists, review and analyze audit findings, and initiate follow-up activities such as corrective/preventive actions. Graphical dashboards provide the ability to monitor the whole audit process.
Issue and Corrective Action Management
The MetricStream solution enables centralized management and tracking of all issues and corrective/ preventive actions, as well as product recalls. Through automatic rule-based routing, non-conformance issues are sent to the appropriate teams for review and disposition. Inbuilt capabilities support issue investigation, root cause analysis, assignment of follow-up actions, and initiation of corrective and preventive action. The solution also enables companies to effectively collaborate with suppliers to avoid potential issues.
The MetricStream solution provides real-time visibility into quality processes, risks, and issues, thereby enabling companies to make more informed business decisions. Users gain a complete view of the quality system with comprehensive aggregate reporting as well as individual case status tracking capabilities. Graphical executive dashboards and flexible reports with drill-down capabilities provide statistics, analytics, and trends on quality and safety, thereby enabling management to respond proactively.
Benefits of the MetricStream Solution
- Elimination of siloes and redundant effort: The MetricStream solution provides a single, common system to manage product quality and safety regulations, communicate requirements to suppliers, capture and analyze testing and compliance data, and proactively address issues. The system breaks down business and functional silos, minimizing inefficiency, and eliminating redundancies.
- Seamless collaboration: The solution provides a common Web-based interface that enables active collaboration between the organization and its cross-functional teams, third-party auditors, suppliers, and third-party testing labs.
- Increased traceability and accountability: Using the solution, organizations can link all their suppliers, to sub-suppliers, facilities, factories, and products in a many-to-many relationship model. This clear mapping increases visibility into the supply chain, and simplifies the process of tracing a quality issue or risk back to the source.
- Proactive risk management: Powerful risk analyses tools help in identifying risks (e.g. quality/ safety risks and compliance risks) right at the initial stages of the product lifecycle. The solution also helps address these risks in a timely manner so that they don't impact future stages of production. Centralized risk libraries help in establishing a common and consistent risk language across the organization and its suppliers.
- Systematic and efficient quality audits: The solution streamlines the complete quality audit lifecycle, and facilitates risk-based audits for improved resource-efficiency. Advanced capabilities such as an offline audit briefcase, automatic alerts, and shared audit calendars optimize each audit, and enable organizations to effectively identify deviations and areas of improvement.
- Multi-regulation compliance: The solution can be used to manage compliance with the complete range of product quality and safety regulations (e.g. REACH, CPSIA) as well as relevant local labor laws, working conditions, environmental requirements, legal requirements, and ethical standards.