WHO S READY FOR OSHA S HCS AND THE GHS?

Transcription

1 WHO S READY FOR OSHA S HCS AND THE GHS? A BENCHMARK SURVEY REPORT ON GHS READINESS BY CHEMICALS MANUFACTURERS, SUPPLIERS, AND DISTRIBUTORS

2 WHO S READY FOR OSHA S HCS AND THE GHS? A BENCHMARK SURVEY REPORT ON GHS READINESS BY CHEMICALS MANUFACTURERS, SUPPLIERS, AND DISTRIBUTORS Yesterday s Labeling Software Is No Longer Enough. In response to the complexity inherent in the processing, supplying, manufacturing, warehousing, and distribution of chemicals throughout the global supply chain, OSHA s Hazard Communication Standard brought U.S. regulations into alignment with the United Nations Globally Harmonized System of Classification and Labelling of Chemicals with a compliance deadline of June 1, 2015.** Loftware wanted to find out how companies are faring in their ability to manage the complex set of requirements for the labeling of chemicals and chemical products. From raw materials to finished goods, companies face more complexity in chemical labeling and risk heavy penalties for non-compliance. Do chemicals companies have labeling systems in place to accommodate this new level of complexity? As part of OSHA s GHS-aligned HCS, companies need to: Access multiple data systems and SDS applications Include 6 HCS elements Fill in all pictograms Fulfill regional regulatory requirements Include customer requirements Include multiple languages, and more. Now that the deadline has passed, many questions still linger. Who is prepared? Do companies really understand what s involved? What are the obstacles most companies face? What is the impact on barcode labeling? How does non-compliance impact organizations in the chemicals supply chain? In June of 2015, Loftware, Inc., the global market leader in Enterprise Labeling Solutions, conducted a survey to understand the readiness, or lack thereof, of organizational alignment with OSHA s HCS and the GHS. Since OSHA s HCS is now aligned with the GHS, for the purposes of this report we are referring to OSHA s HCS and GHS as one, simply as GHS, as it is typically referred to in the United States. Loftware recruited participants through a combination of marketing and social media. Survey results reflect the viewpoints of 138 global representatives from chemical companies, including regulatory, supply chain, operations, and IT. All were involved with GHS requirements and labeling for their organizations.

3 Who is prepared for GHS Labeling? Surprisingly, in response to the question of whether companies had or had not successfully completed their GHS labeling compliance requirements, the majority, or 55% (Chart 1) of supply chain professionals were either unsure, or not prepared, by June 1st. For a variety of reasons, a surprising number of companies are still months away from being able to meet all of the new GHS-aligned HCS labeling requirements as mandated by OSHA.** QUESTION: HAVE YOU SUCESSFULLY COMPLETED YOUR GHS LABELING COMPLIANCE REQUIREMENTS FOR THE JUNE 1ST DEADLINE? 44.85% Responses: Yes 44.85% 15.44% No 15.44% 39.71% Not Sure 39.71% Organizations took a significant amount of time to prepare for GHS compliance. Out of those who successfully met the GHS labeling requirements by June 1st, nearly 1 in 4 organizations took 1-2 years or even longer to prepare. (Chart 2) QUESTION: HOW LONG DID IT TAKE YOU TO SUCESSFULLY MEET THE NEW GHS LABELING REQUIREMENTS? < 6 Months 45% 6-12 Months 31.67% 1-2 Years 20% > 2 Years 3.33% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

4 Even more surprising is that 65% of respondents still working towards meeting all of the requirements need at least another 6-12 months, with 9% expecting to need more than 2 years. (Chart 3) QUESTION: WHEN DO YOU EXPECT TO SUCESSFULLY MEET 100% OF THE NEW GHS REGULATORY REQUIREMENTS? < 6 Months 35.38% 6-12 Months 29.23% 1-2 Years 26.15% > 2 Years 9.23% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

5 Forty-three percent (43%) of survey participants responded that a major obstacle to meeting GHS labeling is a lack of awareness of all the specific requirements. (Chart 4) QUESTION: WHAT ARE YOUR REMAINING OBSTACLES IN MEETING GHS LABELING REQUIREMENTS? (PLEASE CHECK ALL THAT APPLY) 43.08% Are not aware of all the GHS labeling requirements Not aware of all the requirements 43.08% Not enough staff 21.54% Other priorities more important 20% Limitations of current barcode label printers 16.92% Inability to print in color / meet new pictogram standards 13.85% Lack of ability to classify new chemicals 13.85% Limitations of current barcode label software 12.31% Not enough financial resources 10.77% Not enough time to meet all of the requirements 10.77% Other (please specify) 10.77%

6 Respondents that haven t completed their GHS requirements still need to: configure their software solutions (35%), ensure enterprise applications have the necessary data (32%), and finalize their business plans for GHS labeling (24%). (Chart 5) QUESTION: WHAT ARE YOUR NEXT STEPS TOWARD BECOMING FULLY GHS COMPLIANT? (PLEASE SELECT ALL THAT APPLY) 35.38% Will configure or modify their existing barcode labeling software Configure or modify existing barcode labeling software Ensure enterprise labeling applications have the necessary data to support GHS labeling Integrate with additional regulatory data applications 35.38% 32.31% 26.15% Finalize business plans for GHS labeling 24.62% Purchasing color printers 16.92% Other (please specify) 16.92% Purchasing different barcode labeling software 7.69% Purchasing pre-printed label stock 7.69%

7 CHEMICAL CO. Elements of a GHS Label Fifty-nine percent (59%) of the respondents are not able to meet all 6 of the necessary elements of the GHS label. Additionally, twenty-five percent (25%) of respondents do not know if they are able to meet the 6 necessary elements of a GHS label. [Chart 6] PICTOGRAMS PRODUCT NAME OR IDENTIFIERS SIGNAL WORD HAZARD STATEMENTS PRECAUTIONARY STATEMENTS SUPPLIER IDENTIFICATION n-propyl Alcohol UN No See SDS further information CAS No DANGER Highly flammable liquid and vapor. Causes serious eye damage. May cause drowsiness or dizziness. Fill Weight: lbs. Keep away from heat/sparks/open flames/hot surfaces. No smoking. Avoid breathing Gross Weight: 20lbs fumes/mists/vapors/spray. Wear protective gloves/protective clothing/eye protection/face protection. IF IN EYES: Rinse cautiously with water for several minutes. Remove contact lenses if present. Expiration Date: 6/21/2030 Continue rinsing. Von Hitze / Funken / offener Flamme / heißen Oberflächen fernhalten. Rauchen verboten. Einatmen Lot Number: B von Rauch / Nebel / Dampf / Aerosol. Schutzhandschuhe / Schutzkleidung / Augenschutz / Gesichtsschutz tragen. WENN IN DEN AUGEN : behutsam mit Wasser spülen für mehrere Minuten. Fill Date: 6/21/2014 Wenn vorhanden Kontaktlinsen entfernen. Weiter spülen. Lorem ipsum dolor sit amet, consectetur / / / / / / adipiscing elit. Suspendisse placerat / / / nisl eget sapien ornare ornare. Etiam. ABC Chemical Company 110 Pease Road Portsmouth, NH USA BRANDING LOT/BATCH# BARCODE ADDITIONAL REGULATORY CONTENT LANGUAGES QUESTION: OF THE 6 NECESSARY ELEMENTS OF A GHS LABEL, WHICH, IF ANY, IS YOUR ORGANIZATION STILL WORKING TOWARDS BECOMING FULLY COMPLIANT? (PLEASE SELECT ALL THAT APPLY) Hazard Statements Supplier Identification Pictograms Product Name or Identifiers Precautionary Statements Signal Word None. We are able to meet... 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Hazard Statements 16.39% Supplier Identification 15.57% Pictograms 13.11% Product Name or Identifiers 11.48% Precautionary Statements 11.46% Signal Word 6.56% None. We are able to meet all 6 of the necessary elements of a GHS label 40.98%

8 Impact of Non-Compliance GHS-aligned regulations are an integral part of labeling now and moving forward. In fact 72% (Chart 7) of those surveyed believe the inability to meet these standards may result in loss of customers, regulatory and customer fines, disruptions to their business and delays in the supply chain. One in four (Chart 8) chemical industry professionals surveyed are concerned that they will face penalties for non-compliant GHS labels. QUESTION: WHAT IMPACT WOULD NON-GHS COMPLIANT LABELS HAVE ON YOUR ORGANIZATION? (PLEASE SELECT ALL THAT APPLY) Regulatory fines and penalties Disruption to business Delays in the supply chain Customer fines and penalties Loss of customers Inability to enter new markets None 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Regulatory fines and penalties 47.37% Disruption to business 40.35% Delays in the supply chain 40.35% Customer fines and penalties 26.32% Inability to enter new markets 18.42% Loss of customers 17.54% None 18.42%

9 QUESTION: ARE YOU CONCERNED THAT YOU WILL FACE FINES AND PENALTIES FOR NON COMPLIANCE GHS LABELS POST THE JUNE 1ST DEADLINE? YES 26.32% NO 73.68% 1 in 4 Industry professionals are concerned that they will face fines & penalties for non-compliant labels What are the most critical challenges to GHS labeling compliance? Regulatory Awareness OSHA s HCS and GHS bring a multitude of complexities to chemical companies, including more varied international regulations and customer requirements than ever before. Only 57% of supply chain professionals rated their organizational awareness of GHS labeling requirements as extremely aware. This percentage is expected to decrease as the number of governmental regulations regarding chemicals around the world continues to grow, compounding labeling complexity everywhere. (Chart 9) QUESTION: HOW AWARE IS YOUR ORGANIZATION OF YOUR GHS LABELING COMPLIANCE REQUIREMENTS? 57.25% 2.17% Extremely Aware Slightly Aware Not Aware Responses: 57.25% 40.58% 2.17% 40.58%

10 GHS Labeling Requirements Survey results highlighted the complexity of GHS labeling. More than 1 in 3 respondents said regulatory compliance is the most difficult aspect of labeling. Closely following behind in difficulty were the variety of label sizes, and color and pictograms. (Chart 10) QUESTION: WHICH OF THE FOLLOWING AREAS OF GHS LABELING REQUIREMENTS DOES YOUR ORGANIZATION FIND TO BE THE MOST DIFFICULT TO MEET? Regulatory Information Variety of product label sizes Color & Pictograms Languages Product Information None New chemical classifications Branding requirements 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Regulatory information 35.29% Variety of product label sizes 30.88% Color & Pictograms 24.26% Languages 21.32% Product Information 20.59% None 20.59% New chemical classifications 19.12% Branding requirements 10.29%

11 The complexities of GHS labeling have ushered in a new era of labeling solutions and strategies across the supply chain. In fact, just less than half (49%) (Chart 11) of respondents were able to meet all the new GHS labeling requirements with their existing labeling solutions. Companies need to have a robust capability to address complex regulatory requirements and data variability involved in GHS labels. QUESTION: DID YOUR EXISTING LABELING SOLUTION MEET ALL YOUR GHS LABELING REQUIREMENTS? 49.28% 21.74% Responses: Yes 49.28% No 21.74% Not Sure 28.99% 28.99%

12 Along with implementing and enhancing labeling software solutions, an additional 40% of respondents needed to purchase new color printers or additional pre-printed label stock in order to meet the new GHS labeling standards. (Chart 12) QUESTION: IN ORDER TO MEET THE NEW GHS REQUIREMENTS DID YOU NEED TO DO ANY OF THE FOLLOWING? (PLEASE SELECT ALL THAT APPLY) Purchase new color printers... Enhance existing barcode... Purchase additional pre-printed... None, existing barcode... Implement new barcode... Not sure 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Purchase new color printers 29.71% Enhance existing barcode labeling software 27.54% Purchase additional pre-printed label stock 23.91% None, existing barcode labeling software and hardware was able to meet all requirements 20.29% Implement new barcode labeling software 16.67% Not sure 21.01%

13 Integrated Labeling Solutions are a Necessity Today s labeling must be both dynamic and data-driven to meet GHS labeling standards. In fact, 91% (Chart 13) of respondents are driving label data from enterprise applications and 62% (Chart 14) use separate applications specifically for regulatory data. Certified integration to enterprise applications for label data is necessary for companies to automate labeling processes while ensuring label data accuracy. QUESTION: FROM WHICH SYSTEMS IS YOUR LABEL DATA COMING FROM CURRENTLY? (PLEASE SELECT ALL THAT APPLY) ERP (SAP, Oracle, Other) Stand-alone or custom database SAP EHS module None Regulatory database SDS authoring database PLM or Content Management System Lab system 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% ERP (SAP, Oracle, Other) 40.40% Stand-alone or custom database 28.28% SAP EHS module 21.21% None 21.21% Regulatory database 15.15% SDS authoring database 15.15% PLM or Content Management System 7.07% Lab system 4.04%

14 QUESTION: DOES YOUR COMPANY HAVE A SEPARATE SYSTEM FOR REGULATORY DATA, AND IF SO, WHICH ONE? (PLEASE SELECT ALL THAT APPLY) 37.37% 15.15% Responses: None 38.38% SAP 37.37% 38.38% Other 15.15% A Transition to Color Printing Today, over 1 in 4 GHS labeling professionals rely on preprinted stock for their GHS labels. In just 3 years time that number is expected to drop to about 10%. Enterprise organizations are starting to heavily invest in new color printing technologies and are leveraging enterprise labeling solutions that offer color printing support. (Chart 15) % 10% In just 3 years, only 10% of labeling professionals will rely on preprinted stock for their GHS labels.

15 SUMMARY What Does All This Mean for Labeling in the Chemical Industry? First and foremost, regulatory compliance is a major concern to chemicals supply chain professionals in the GHS environment today. The thousands of regulated chemical ingredients, and the frequent additions and changes in hazardous chemicals lists are a serious business, demanding significant time and resources in labeling accurately. One of the biggest challenges for chemical companies in complex supply chains is how to identify the best barcode labeling strategies that can ensure accuracy, speed, and cost effectiveness. Managing all the regulatory variations, avoiding fines and penalties, and supporting consistency across the global supply chain as products make their way to their destinations points to the need for highly streamlined, automated, enterprise-wide labeling solutions. In addition to pressing regulatory requirements, however, there are increasing numbers of customers requiring labels that accommodate them and their own supply chains. Without the ability to respond quickly to customer requests for specific labeling changes and additions, chemicals suppliers and manufacturers can lose out to those who better meet their requirements. A robust, flexible enterprise-wide labeling solution can provide a significant competitive edge, allowing for access to new markets with impressive speed. Efficiency in supply chain labeling is only possible through a highly automated, reliable integration to data repositories such as SAP, Oracle, and other ERP systems and applications. Efficient automation prevents costly downtime, and where every dollar counts, avoiding labeling mishaps can add up to substantial cost savings. Redundant labeling is eliminated because a smoothly running, centralized enterprise-wise labeling solution can include chemicals supply chain partners and their requirements for remote label printing. In today s global supply chain, disruptions in labeling are of real concern and require special preventative planning. If, due to unforeseen calamities, labeling must be moved to another location, the ability for alternate locations to access centralized data can be the difference between the continuation of business-as-usual or not. An enterprise-wide labeling solution may be one of the most important ways a chemicals company can ensure business continuity when facing critical supply chain challenges. And what about the need to collaborate with all of the stakeholders in a global supply chain? It isn t just customer requirements or stiff regulatory requirements that are at issue for chemicals companies. Suppliers, contract manufacturers, and logistics providers each have their own labeling requirements and needs, but what is the best way to work with each of these organizations? Again, it is only through a truly enterprise-wide labeling solution. Supply chain efficiency, by its very nature, must provide for a high level

16 of collaboration with the large number of participants and their supply chains. Each entity needs to interact with and relate to a barcode label in a way that meaningfully provides visibility throughout the complex global supply chain. If the role of suppliers can be facilitated seamlessly within a centralized, standardized labeling solution, relabeling and mislabeling can become a thing of the past. Labeling solutions must allow for a high level of configurability and segmentation based on production processes and regional requirements, while still maintaining consistency. Labeling variations, flexible label design, and lessening the burden on IT to frequently write and rewrite code to meet special requirements all of these aspects can only be accommodated by a truly enterprise-wide labeling solution. Finally, brand consistency is a big consideration. Often overlooked as a competitive benefit, the importance of brand consistency on a label cannot be under estimated. Today s customers are sophisticated and detail oriented. Labeling with branding consistency is a major part of expressing the face of a company and its healthy business persona over time. Without brand consistency, the image of a company is eroded, negatively impacting customers perceptions. Certainly HCS and GHS regulatory requirements are of primary concern for many chemicals suppliers, manufacturers, and supply chain partners. For many more reasons, however, Loftware Enterprise Labeling Solutions can provide global chemicals organizations with supply chain efficiency. Contact us to learn more about how we can support you in approaching labeling in a way that helps prevent HCS and GHS labeling mishaps, and simultaneously provides significant business benefits to your organization. *The authors of this report make no claim to statistical significance. All data derived from this report should be considered observational. **In July of 2015, just prior to the release of the findings of this survey, OSHA released a 124-page OSHA Instruction booklet, cancelling previous interim enforcement guidance instructions including those of February 9, 2015, and May 29, Note that for supply chain labeling, OSHA instructions have remained consistent in their one exception, which is that distributors only may continue to ship with labeling as prior to June 1, 2015 up to December 1, 2015 if they received product from a manufacturer prior to June 1st. The June 1, 2016 deadline for alternative labeling only refers to workplace labeling, the responsibility of employers. Please refer to for information in the document titled, Inspection Procedures for the Hazard Communication Standard (HCS 2012), effective July 9, 2015 (Directive Number: ).