As new market pressures to manufacture "sustainable" or "green" products continue to increase in scope and intensity, manufacturers are looking to product compliance software for help. Meeting compliance regulations is no longer enough as customers increasingly seek products that are environmentally friendly, recyclable and made by companies that practice social ethics.
Manufacturers should expect new legislation to increase in scope as governments continue to respond to people's demand for greener, ethical products. Given these market and regulatory pressures, manufacturers should expect new requirements not just for environment, health and safety (EHS) reporting, but for greener product materials, green manufacturing processes and sustainable supply chains.
What follows is some advice on identifying the software, system and maintenance requirements for tracking and reporting the product attributes that have the strongest bearing on sustainability concerns.
Product compliance software: Niche vendors best?
I am still surprised how often people in various industries say they plan to meet an emerging software need by using an existing platform -- without doing a needs assessment. Choosing an incumbent vendor often seems safe: The vendor has built trust with those involved in the decision, and its offering becomes the obvious default. There may be perceived cost savings from tapping into an existing budget or software license. The reality is, however, that while incumbent vendors may have a solution to offer, it might not hit the bull's-eye.
Because EHS and product compliance reporting will only get more demanding, it's worth taking the time to map out today's and tomorrow's requirements to find the best software partner for the long term. The right software can give a manufacturer the competitive edge not only in making comprehensive sustainability claims but also in quickly identifying the best and most attractive "green" suppliers. Cost savings can also come from identifying the software provider that can best help automate sustainability reporting and correspondence throughout the supply chain.
Integration easier with small software providers
Integrating data across disparate platforms can be a daunting task. The argument for incumbent vendors has always been "too many chefs spoil the broth," so using fewer vendors is wiser. However, even if a majority of data resides on a main platform, most corporations still have disparate systems and need data integration.
The good news is there has been a positive shift in data integration capabilities. The emergence of specialized software providers -- a phenomenon I have observed in the automotive and electronics industries -- and advances in data technology have made integration easier. Companies might not need to first implement an entire enterprise information management (EIM) platform or data integration tool to improve their compliance reporting. Instead of thinking too big, it may be possible to think tactically about critical applications that need immediate attention.
The emergence of small application providers that work with large systems is due in part to connectivity improvements that have been made to established database technologies. Integration projects remain an art and a science, however, so due diligence in verifying a vendor's ability to work with your specific data assets and systems is of utmost importance.
Requirements for compliance software
Companies that want better tracking and management of product compliance and sustainability reporting should consider the following questions when assessing incumbent and new software vendors:
- Sustainability expertise and services: How well does the vendor track worldwide market trends and legislative issues in your industry sector? To what degree can you rely on it to anticipate new industry requirements in its products? Does the vendor offer regulatory advice?
- Business fit: What are the near-term reporting features that your company needs most to stay ahead of compliance requirements? How many of these compliance concerns does the vendor cover and how many will your company have to handle on its own?
- Connectivity and integration capabilities: Can the vendor connect to your existing systems without customization? How much effort will it take? If it's a new vendor, can it prove that it has handled similar integrations well and has solid expertise in working with similar environments? What is the time frame to full connectivity? How much can be automated to avoid manual labor and duplication of effort?
- The real cost of maintenance: Which features come off the shelf and which need to be customized? Will future software releases cost time, effort and money? How will using the provider impact the company's maintenance budget over time?
- Long-term ability to change data inputs and reporting: Test what it will take for the software to handle new compliance reporting. A current example is conflict minerals reporting under the U.S. Dodd-Frank Act. How quickly can the vendor respond and what will it charge for such new reporting?
- Automation of manual effort: The best systems will not only provide reports but anticipate what information is missing before generating the report. How does the software help minimize human intervention, including email correspondence with suppliers?
- Ease of use: Is it intuitive? Do people like using it or do they have frequent problems?.
Small software vendors can be surprisingly sophisticated. I've seen them provide data applications that are feature rich, require less customization and can be quickly integrated with a company's data platform.
Selling sustainable products is no longer just about being compliant. It's also about embracing a transparent and well-communicated policy of corporate responsibility while making products that are environment-friendly and of ethical and fair-trade origin. However you get there, starting with a strong requirements plan is well worth the time and effort.
About the author
Liz Garnand is a principal at Newport Consulting Group (Clarkston, Mich.). She works in the strategy and operations practice, focusing on marketing and business growth. Email her at firstname.lastname@example.org or follow her on Twitter (LizGarnand).