Product Stewards Can Reduce Risk in the Supply Chain

Mitch Fonda dangled a power cord in front of the audience at Stewardship 2015. The cord bore the CE mark, meaning that it met certain requirements, allowing it to be sold in Europe.

Product stewards are used to thinking of those kinds of requirements in terms of safety and health, but they are also market-access requirements. In other words, if you don’t meet the regulations required by a market, your product can’t be sold there, no matter how safe.

When product stewards focus only on compliance, their efforts can be for nothing. “You can get inundated and all those good things can go to waste if we don’t think about how it impacts our supply chain,” said Mitch Fonda, senior manager of global product stewardship at Waters Corporation, during his presentation Product Stewardship Impact to Supply Chain Risk Management.

The risks in your supply chain include inventory management, material changes, supply chain capacity, make-or-buy decisions and cost reductions, said Fonda.

He recounted an anecdote about a product that needed China’s CCC mark. Because not all the part number sourcing had CCC mark certification, the company had to find another source to meet demand. Working with different vendors (in multiple countries) poses problems for quality assurance, and introduces risk into the supply chain. Ultimately, the solution was for the original vendor to increase capacity so that all the parts coming from the factory go through the CCC certification process. “That’s a simple example of supply chain risk management,” said Fonda.

One way to deal with risk is to start early, by communicating with your product development teams. With new products, risks are often baked into the design of the product, and it’s not easy to reformulate down the road. Fonda emphasized that customers want you to tell them that what they’re buying is compliant. “In essence, your compliance program is their compliance program,” he said.

Risk also enters the supply chain at the procurement level. During prototyping, the vendor used by R&D may not be the same vendor who performs the high-volume manufacturing, leading to a new source of materials. Fonda recommends educating the procurement department about REACH requirements and other relevant regulations.

If possible, also get the marketing department involved. When a new product comes out, it may not be available in all markets. The business has to consider feasibility after knowing all the regulatory requirements.