Product Stewardship and Product Compliance. May 8, 2012

Transcription

1 Product Stewardship and Product Compliance Spring 2012 Regents Benchmarking Survey May 8, 2012

2 Introducing APQC APQC is a member-based, 501(c)3 nonprofit specializing in benchmarking, knowledge management, measurement, and process improvement. Leveraging benchmarks and best practices obtained from more than 7,000 projects, APQC helps organizations to rapidly define and prioritize improvement efforts.

3 Agenda Background, Objective, Methodology Respondent Profile Summary of Key Insights Discussion of Key Insights Product Stewardship Activities Roles and Responsibilities Product Compliance and Data Management Supply Chain Engagement

4 Background, Objective, Methodology Background: Compliance with Global regulations like REACH, ROHs is forcing new process changes for global manufacturers Data D t management and supply chain engagement are renewed challenges Objective: Objective: To understand how leading organizations are leading the evolution toward more mature product stewardship management

5 Respondent Profile 17 Respondents Respondents Represent Companies with global reach Diverse Industries Represented Manufacturing Pharmaceutical/Medical Food/Foodservice d Transportation Other Mining Energy/Utility Electronics Aerospace/Defense Academic Institution 18% 12% 29% 0% 10% 20% 30% 40%

6 Responding on Behalf of Specific Business Unit, 12% Entire Enterprise Specific Business Unit Entire Enterprise, 88%

7 Key Insights: Product Stewardship Activities Corporate Product Stewardship programs are in a period of rapid maturity: The majority of respondents have ongoing programs, initiatives or management systems to address: product packaging, energy efficiency, supplier engagement, compliance, product manufacturing, new product development and distribution/shipping. Companies are looking to formalize their systems The majority of respondents reported some attempt, at least on an ad hoc basis, to build more mature processes around all 15 product stewardship activities.

8 Product Stewardship Program Scope Distribution, shipping and transportation Product manufacturing New product development Supplier engagement Product packaging improvements Product energy efficiency Product regulatory compliance Material a substitutionsu s Low Maturity High Maturity

9 Product Stewardship Program Scope and Depth Distribution, shipping and transportation Product manufacturing New product development Supplier engagement Product packaging improvements Product energy efficiency Product regulatory compliance Material substitutions Product design improvements Life cycle assessments Supply chain transportation Product greenhouse gas footprinting Product water efficiency Product take-back and recylcing Eco-labeling Immature Highly Mature

10 Discussion: Product Stewardship Activities How does this profile compare to how your organization defines product stewardship? What s the difference between product stewardship and product compliance? What are the business drivers for your product stewardship efforts? What inhibitors still exist? What steps are you taking to overcome them? How do you set product stewardship priorities? NAEM s Regents members shared that they too were seeing an evolution toward a more sophisticated set of solutions. There was also general agreement that organizations were prioritizing those efforts that had the biggest financial impacts (either on the revenue side or cost containment/risk side) and were slower to focus on those issues that had less of a financial impact.

11 Key Insights: Roles and Responsibilities There is no consistent approach to managing product stewardship efforts Depending upon the activity, EHS, product development, supply chain and manufacturing all play significant roles. EHS leads in the areas of compliance and greenhouse gas Other departments lead associated activities ities such as eco-labeling and supply chain transparency Supply chain and procurement are responsible for chemical tracking

12 Discussion: Roles and Responsibilities How do the various departments work together on product stewardship activities? Which function is responsible for product stewardship efforts? Who is accountable for a team effort? To whom do they report? As product stewardship efforts become more mature, do you think EHS will receive more staff, budget, or other resources? When EHS is not the lead, what is its role? And how does EHS add value to the team? Is EHS the right function to lead the evolution toward more mature processes/systems? Why/why not? NAEM s Regents members echoed these observations as well. We went around the room and identified where EHS reported inside their organizations; the first eight members called on each shared a different reporting model. There was resistance to the assumption that EHS wanted to lead. p Several members shared that the role of EHS is to whisper in the ear of leadership not to actually lead compliance or other product stewardship efforts.

13 Key Insights: Product Compliance and Data Management Compliance-related issues are the priorities for chemical tracking Materials content, and anything required by U.S. and non-u.s. regulatory statutes are the top priorities Almost two-thirds of respondents have some formal product compliance system. 38% use an off-the-shelf tool, while the rest are split between having one built by an outside vendor or building something custom in-house. 57% of respondents refresh their data only on an ad hoc basis About one-quarter of respondents use spreadsheets to track data; only 12% have a EHS MIS. Most companies only track chemical product data from direct suppliers Less than three in ten collect data from tier 2 suppliers and fewer than two in ten go further than that.

14 Functions Responsible for Tracking and Managing Supplier Information Supply Chain/Purchasing EHS Regulatory Affairs/Quailty Product Development Other R&D Sustainability Manufacturing Sales and Marketing Legal 35% 29% 24% 24% 18% 18% 47% 88% 0% 20% 40% 60% 80% 100% Share of respondents indicating which functions are responsible for tracking and managing supplier information

15 Information Collected From Suppliers Materials Content 94% U.S. Regulatory Status 71% Non -U.S. Regulatory Status 65% Materials Orgin 47% Greenhouse Gases 29% Other 18% None of the above Share of respondents who collect above information from suppliers

16 Discussion: Product Compliance and Data Management Procurement is typically charged with chemical product data collection, but would another approach work better? Should a procurement team member be embedded within EHS? What other organizational strategies might be worth considering? Is the size of your EHS function sufficient? How many people do you think you need? Does the size of your EHS staff affect the prioritization of product stewardship efforts? Do you think you have the adequate systems in place the manage the quantity and quality of data you re responsible for? What system do you think would be the most effective? Regents members shared that their experience is that procurement is charged with data collection and are generally confident in procurement s ability to collect the necessary data inputs. However, privately, members shared less confidence when asked about suppliers in less-regulated geographies (India, China and developing countries) or when there were multiple layers of suppliers. Best Practice: To do more with less (a common mantra among Regents members), some organizations required EHS approval for new suppliers; this was deemed to be far more efficient than having EHS validate each new product from each supplier.

17 Key Insights: Supply Chain Engagement Supplier Engagement is a process When suppliers aren t responsive to chemical product requests, only half of respondents have an alternative method of data collection. The most common strategy is to make a second request or schedule a meeting with the vendor. Less than one-third of respondents say they will drop unresponsive suppliers. Supplier relationships are typically managed by the business itself Only 44% of respondents are members of a consortium or other coalition for collecting information from the supply chain such as JAMP, EICC, or IMDS.

18 Discussion: Supply Chain Engagement What strategies or specific actions have you found are most effective in getting suppliers to be more responsive? Why are so few organizations willing to drop non-responsive suppliers? What are your experiences with data collection consortiums and coalitions? Why do you think so few respondents use them? Regents members shared that the cost of replacing a supplier is too high for it to be a realistic option for most non-compliant suppliers. That observation then led to a realization that there s the very real potential for breakdown in the ability to collect supplier data, or for your suppliers to collect data from their suppliers and the associated risk involved.

19 Appendix

20 Responding on Behalf of Specific Business Unit, 12% Entire Enterprise Specific Business Unit Entire Enterprise, 88%

21 Revenue Representation 41% 18% 35% $100 million to $999 million $1 billion to $9 billion $10 billion to $25 billion Greater than $25 billion

22 Industry Representation Manufacturing Pharmaceutical/Medical Products 18% 29% Food/Foodservice Transportation Other Mining Energy/Utility Electronics Aerospace/Defense Academic Institution 12% 0% 5% 10% 15% 20% 25% 30% 35%

23 Geographic Representation United States Mexico 60 Europe Asia Latin America 40 South America Africa 20 Australia Middle East 0 Percentage of respondents with a presence in (choose all that apply)

24 Ongoing program, initiative or management system Q6: Please indicate your organization s stage of development for each of the following product stewardship efforts. Distribution/Shipping ib ti i Product Manfucturing Product Development Compliance Supplier engagement Energy efficiency Product packaging Product greenhouse Material subsititutions Life cycle Design improvements Water efficiency Product take-bake Supply chain transparency Eco-labeling 41% 41% 35% 35% 29% 24% 24% 18% % 65% 59% 53% 53% 0% 20% 40% 60% 80% 100% Share of respondents with ongoing program, initiative, or management systems

25 Just starting to formalize program, initiative, or management system Q6: Please indicate your organization s stage of development for each of the following product stewardship efforts. Life cycle Water Efficiency Eco-labeling Product greenhouse Design improvements Product take-bak Energy Efficiency Product packaging Material subsititutions Supply chain transparency Compliance Supplier engagement Product Development Product Manufacturing Distribution/Shipping 0% 12% 12% 18% 18% 24% 24% 24% 24% 29% 29% 35% 35% 41% 0% 10% 20% 30% 40% 50% Share of respondents just starting to formalize program initiative, or management system

26 No formal program/initiative/system, but ad hoc efforts are underway Q6: Please indicate your organization s stage of development for each of the following product stewardship efforts. Life cycle Water efficiency Eco-labeling Product greenhouse Design improvements Product take-back Energy efficiency Product packaging Material subsitutions Supply chain transparency Compliance Supplier engagement Product development Product manufacturing Distribution/shipping 0% 12% 18% 18% 24% 24% 24% 24% 29% 29% 35% 35% 41% 0% 10% 20% 30% 40% 50% Share of respondents with no formal program/initiative/system, but ad hoc efforts are underway

27 No formal program/initiative, but planning to start one Q6: Please indicate your organization s stage of development for each of the following product stewardship efforts. Eco-labeling Water efficiency Product take-back Product greenhouse Energy efficiency i Product development Supply chain transparency Material subsitutions Life cycle Supplier engagement Product packaging Product manufacturing Distribution/shipping Compliance Design improvements 0% 13% 12% 12% 12% 24% 24% 29% 29% 35% 0% 10% 20% 30% 40% Share of respondents with no formal program/initiative/system, but planning to start one

28 No formal programs and no plans to start one Q6: Please indicate your organization s stage of development for each of the following product stewardship efforts. Product take-back Eco-labeling 29% 29% Product greenhouse 18% Water efficiency Energy efficiency 12% 12% Product development Compliance Product packaging Product manufacturing 0% 5% 10% 15% 20% 25% 30% 35% Share of respondents with no formal program/initiative/system, and no plans to start

29 EHS Involvement in Product Stewardship Efforts Q7: Which business function is the lead for each of following product stewardship efforts? Product greenhouse Compliance Life cycle Water efficiency Energy efficiency Product take-back Eco-labeling Product manufacturing Product development Supply chain transparency Product packaging Design improvements 7% 7% 7% 13% 13% 13% 13% 20% 20% 40% 47% 47% 0% 10% 20% 30% 40% 50% Share of respondents with EHS involvement in product stewardship efforts

30 Legal Involvement in Product Stewardship Efforts Q7: Which business function is the lead for each of following product stewardship efforts? Water efficiency 7% Eco-labeling 7% Design improvements 7% 0% 2% 4% 8% Share of respondents with Legal involvement in product stewardship efforts

31 Manufacturing Involvement in Product Stewardship Efforts Q7: Which business function is the lead for each of following product stewardship efforts? Product manufacturing 80% Distribution/shipping Product packaging Energy efficiency 33% 27% 20% Supply chain transparency Water efficiency Compliance Material subsitutions Life cycle 7% 7% 7% 7% 7% 0% 20% 40% 60% 80% 100% Share of respondents with Manufacturing involvement in product stewardship efforts

32 Product Development Involvement in Product Stewardship Efforts Q7: Which business function is the lead for each of following product stewardship efforts? Design improvements Product development Material subsitutions Energy efficiency Product greenhouse Life cycle Supplier engagement Distribution/shipping Eco-labeling Supply chain transparency Product packaging Product manufacturing 7% 7% 7% 13% 13% 13% 27% 27% 27% 40% 47% 47% 0% 10% 20% 30% 40% 50% Share of respondents with Product Development involvement in product stewardship efforts

33 Regulatory Affairs Involvement in Product Stewardship Efforts Q7: Which business function is the lead for each of following product stewardship efforts? Product take-back k Compliance 13% 13% Supply chain transparency Energy efficiency Product greenhouse Eco-labeling Product manufacturing Material subsitutions 7% 7% 7% 7% 7% 7% 0% 5% 10% 15% Share of respondents with Regulatory Affairs involvement in product stewardship efforts

34 R&D Involvement in Product Stewardship Efforts Q7: Which business function is the lead for each of following product stewardship efforts? Material subsitutions Product development Product packaging Design improvements Water efficiency Energy efficiency Life cycle Product greenhouse Compliance Eco-labeling 7% 7% 7% 13% 20% 20% 27% 33% 40% 47% 0% 10% 20% 30% 40% 50% Share of respondents with Research and Development involvement in product stewardship efforts

35 Sales and Marketing Involvement in Product Stewardship Efforts Q7: Which business function is the lead for each of following product stewardship efforts? Eco-labeling 33% Product take-back 7% 0% 5% 10% 15% 20% 25% 30% 35% Share of respondents with Sales and Marketing involvement in product stewardship efforts

36 Supply Chain/Purchasing Involvement in Product Stewardship Efforts Q7: Which business function is the lead for each of following product stewardship efforts? Supply chain transparency 67% Supplier engagement 60% Distribution/shipping 53% Product take-back 20% Product packaging 20% Compliance 13% 0% 10% 20% 30% 40% 50% 60% 70% Share of respondents with Supply Chain/Purchasing involvement in product stewardship efforts

37 Sustainability Involvement in Product Stewardship Efforts Q7: Which business function is the lead for each of following product stewardship efforts? Supplier engagement 7% Supply chain transparency 7% Eco-labeling 7% Life cycle 7% Design improvements 7% 0% 2% 4% 8% Share of respondents with Sustainability involvement in product stewardship efforts

38 Other Involvement in Product Stewardship Efforts Q7: Which business function is the lead for each of following product stewardship efforts? Product take-back Supply chain transparency Product greenhouse Compliance Material subsitutions Life cycle Design improvements Water efficiency Energy efficiency Distribution/shipping Eco-labeling Product packaging Product development 13% 13% 13% 13% 13% 13% 20% 20% 20% 20% 20% 20% 27% 0% 5% 10% 15% 20% 25% 30% Share of respondents with other involvement in product stewardship efforts

39 EHS Leads Product Stewardship Activities Q8: What role does your Environmental Health and Safety (EHS) function take in your organization s product stewardship program? Compliance Product greenhouse Supply chain transparency Water efficiency Product take-back Energy efficiency Eco-labeling Material subsitutions Supplier engagement Product manufacturing Life cycle Design improvements Product development 7% 7% 13% 13% 13% 20% 20% 20% 20% 33% 27% 60% 67% 0% 10% 20% 30% 40% 50% 60% 70% Share of respondents with EHS playing a lead role in product stewardship efforts

40 EHS On the Team of Product Stewardship Activities Q8: What role does your Environmental Health and Safety (EHS) function take in your organization s product stewardship program? Distribution/shipping Product manufacturing Material subsitutions Design improvements Supplier engagement Energy efficiency Product packaging Water efficiency Supply chain transparency Life cycle Product take-back Product greenhouse Compliance Eco-labeling Product development 13% 33% 33% 33% 27% 73% 73% 67% 67% 60% 53% 47% 47% 87% 87% 0% 20% 40% 60% 80% 100% Share of respondents with EHS playing a team role in product stewardship efforts

41 EHS Not Involved with Product Stewardship Activities Q8: What role does your Environmental Health and Safety (EHS) function take in your organization s product stewardship program? Product take-back Eco-labeling Life cycle Product development Supplier engagement Supply chain transparency Water efficiency Design improvements Energy efficiency Product packaging Distribution/shipping Material subsitutions Product greenhouse Compliance Product manufacturing 7% 7% 40% 40% 33% 33% 33% 33% 27% 27% 20% 20% 13% 60% 60% 0% 10% 20% 30% 40% 50% 60% 70% Share of respondents with EHS playing a not being involved in product stewardship efforts

42 Question 9 Approximately how many full-time equivalents (FTEs), in total, does the EHS function provide to support all of the product stewardship efforts listed in question 8?

43 Total Number of FTE s in EHS Supporting Product Stewardship Q9: Approximately how many full-time equivalents (FTEs), in total, does the EHS function provide to support all of the product stewardship efforts listed in question 8? 4 Total Number rd Quartile Median 1st Quartile Housed In EHS Share of respondents with Total Number of EHS FTE s and the distribution playing a lead role in product stewardship efforts

44 Impact of Product Regulations on Business: Significantly Negative Q10: Which of the following statements best describes the impact you think each of these product regulations have had on your business? CA Prop 65 12% BPA restrictions 12% REACH 12% RoHS 0% 2% 4% 8% 10% 12% 14% Share of respondents indicating product regulations are having a significant and negative impact

45 Impact of Product Regulations on Business: Moderately Negative Q10: Which of the following statements best describes the impact you think each of these product regulations have had on your business? CA Prop 65 47% REACH 41% GHS 35% WEEE RoHS 29% 29% BPA restrictions Conflict minerals 24% 24% DOD /NAS411 Lacey Act 12% 12% 0% 10% 20% 30% 40% 50% Share of respondents indicating product regulations are having a modest and negative impact

46 Impact of Product Regulations on Business: Neutral Q10: Which of the following statements best describes the impact you think each of these product regulations have had on your business? Lacey Act DOD /NAS411 82% 88% BPA restrictions Conflict minerals WEEE 65% 65% 65% RoHS GHS CA Prop 65 REACH 53% 47% 41% 41% 0% 20% 40% 60% 80% 100% Share of respondents indicating product regulations are not having having a an impact significant and negative impact

47 Impact of Product Regulations on Business: Moderately e Positive Q10: Which of the following statements best describes the impact you think each of these product regulations have had on your business? GHS 18% RoHS 12% DOD /NAS411 02/NAS411 Conflict minerals WEEE 0% 5% 10% 15% 20% Share of respondents indicating product regulations are having a modest positive impact

48 Impact of Product Regulations on Business: Significantly Positive Q10: Which of the following statements best describes the impact you think each of these product regulations have had on your business? Conflict minerals REACH 0% 1% 2% 3% 4% 5% 7% Share of respondents indicating product regulations are having a significant and positive impact

49 Looking Ahead at the Impact of Product Regulations: Significantly Negative Q11: Which of the following statements best describes the impact you think each of these product regulations will have on your business? REACH 24% CA Prop 65 12% BPA restrictions 12% RoHS 12% Conflict minerals 0% 5% 10% 15% 20% 25% Share of respondents indicating product regulations are having a significant and negative impact

50 Looking Ahead at Impact of Product Regulations: Moderately Negative Q11: Which of the following statements best describes the impact you think each of these product regulations will have on your business? CA Prop 65 41% Conflict minerals GHS WEEE 29% 29% 29% BPA restrictions RoHS REACH 24% 24% 24% Lacey Act 12% 0% 10% 20% 30% 40% 50% Share of respondents indicating product regulations are having a modest and negative impact

51 Looking Ahead at Impact of Product Regulations: Neutral Q11: Which of the following statements best describes the impact you think each of these product regulations will have on your business? DOD /NAS311 02/NAS311 Lacey Act 82% 82% BPA restrictions Conflict minerals WEEE RoHS CA Prop 65 GHS REACH 65% 59% 53% 53% 47% 47% 41% 0% 20% 40% 60% 80% 100% Share of respondents indicating product regulations are having a significant and negative impact

52 Looking Ahead at Impact of Product Regulations: Moderately e Positive Q11: Which of the following statements best describes the impact you think each of these product regulations will have on your business? GHS 24% DOD /NAS311 02/NAS311 18% WEEE 18% RoHS 12% REACH 0% 5% 10% 15% 20% 25% Share of respondents indicating product regulations are having a modest and positive impact

53 Information Collected From Suppliers Q12: Which of the following information does your company collect from suppliers? Materials Content 94% U.S. Regulatory Status 71% Non -U.S. Regulatory Status 65% Materials Orgin 47% Greenhouse Gases 29% Other 18% None of the above Share of respondents who collect above information from suppliers

54 Functions Responsible for Tracking and Managing Supplier Information Q13: Which of the following business functions are responsible for tracking and managing the supplier information referenced above? (Select all that apply.) Supply Chain/Purchasing EHS Regulatory Affairs/Quailty Product Development Other R&D Sustainability Manufacturing Sales and Marketing Legal 35% 29% 24% 24% 18% 18% 47% 88% 0% 20% 40% 60% 80% 100% Share of respondents indicating which functions are responsible for tracking and managing supplier information

55 How far down the Supply Chain do you Collect Materials Content Data Q14: How far down the supply chain does your organization go to collect materials content data/ingredient information? 60% 50% 53% 40% 30% 29% 20% 18% 10% 0% Tier 1 Tier 2 Beyond Tier 2

56 How Organizations Collect and Store Materials Content Data Q15: How does your organization collect and store materials content data/ingredient information from your supply chain regarding your products? Combination 41% Spreadsheets 24% ERP 12% EHS MIS 12% Other Specific software 0% 10% 20% 30% 40% 50%

57 Percentage of SAP users that use the EHS module Q18: If you use SAP, does your organization use the EHS module to store your organization s product compositions and generate Safety Data Sheets (SDS)? 22% Yes No 78% N = 9

58 50/50 Split with a formal Product Compliance Data Management System Q19: With regard to your product compliance data management system, does your organization have a formal system to centrally collect and store that information? 47% 53% Yes No

59 Origin of Centralized Product Compliance System Q20: With regard to the chemical contents of your delivered products, how was your organization s centralized product compliance system built? 0% 38% 38% Don't have one Custom System Oustide Vendor Off the Shelf Outsourced Reporting Needs 13% 13% N = 8

60 Data Management and Communications Functionality Q21: Which of the following statements best describes the data management and communications functionality of the centralized system that tracks the chemical contents of your delivered products? 17% 0% 50% Some manual/automated extraction Manual, but integrated Manual/Siloed/ Spreadsheets Fully Automated 33% N = 6

61 Most Data in Centralized Compliance System is Refreshed on Ad Hoc Basis Q22: How often is data typically refreshed within your centralized product compliance system used to track the chemical contents of your delivered products? 43% 57% Ad hoc Every 12 months Every 6 months Every Month Other 0% 0% 0% N = 7

62 Use of Consortium/Coalition Information from Supply Chain Q23: Does your organization use any consortium or coalition for collecting information from the supply chain such as JAMP, EICC, or IMDS? 44% Yes No 5

63 Method to Capture Content from Non-Responsive Suppliers Q24: When suppliers are not responsive, does your organization use other methods to capture material content such as outside lab analysis? 19% 44% Yes No Other 31% N = 16

64 Reactions/Consequences to Non Responsive Suppliers Q25: What does your organization do about suppliers who do not respond to your inquiries regarding materials content? Meet with Supplier More than one option could be selected Resend Request Drop the Supplier Reduce Supplier Use Threaten Termination Other Nothing N = 42

65 Use of Product Life Cycle Analysis Q27: Do you conduct a product life cycle analysis? 24% Yes, some products Yes, all products No 71% N = 6