Imagine some common wiring used in your products had unsafe phthalate levels, and the discrepancy was discovered after you’ve shipped thousands of units. Now, imagine you provided specifications for that same wiring to several products manufactured across your business units in the automotive, aerospace, and electronics industries.
How would you identify the impacted parts and products, or notify customers and/or regulators? Are you ready to handle a recall that could involve multiple units, product lines, and regions?
If you see the potential for your company losing a lot of money here, you’d be right, and it’s just one possible scenario among several. Missing supply chain data is a leading cause of lost sales for companies with global operations. Each hand you shake introduces your business to countless risks, each with their own potential for severe consequences.
This same risk can be introduced to each of your business units, if it originates from a common supplier or material. If you lack a holistic approach to supply chain data management, it can lead to financial penalties, but also create brand and operational issues as well. Of course, all roads lead back to your bottom line, in the end.
“Don’t let one bad piece of data ruin your year. You need to collect the full spectrum of cross-topical supply chain data.” — Travis Miller, General Counsel
Digital transformation will help your business units get on the same page; however, the level of transformation that service providers offer varies wildly. To mitigate the full spectrum of risk, your organization needs to provide all users access to the same dashboards and cross-topical insights, and that’s not something most solutions can do.
Non-Compliance & Financial Penalties
Even if your company is placing fully-compliant products on the market, you still need documentation to show your technical files align with industry standards, such as IEC 63000. That means producing declarations that show compliance with the regulations your company is in scope of, such as the Registration, Evaluation, Authorisation, and Restriction of Chemicals (REACH) Regulation or the European Union (EU) Waste Framework Directive (WFD). Failing to do so can lead to direct fines, product recalls, and criminal prosecutions.
It can also lead to litigation in places such as California, where the Safe Drinking Water and Toxic Enforcement Act of 1986 (Proposition 65) means severe financial damage to companies that expose customers to hazardous chemicals without warning of their presence.
Not every risk is directly financial, but they all result in lost profits at some point down the line. For example, you may not receive fines in the UK for failing to perform human trafficking and slavery due diligence, but if investors, consumers, and other stakeholders find out about poor human rights standards in your supply chain, it may lead to lost investments or sales.
Learn how Assent helps companies gain investment and build sustainable revenue growth in our guide, “Building Value Into Your Supply Chain Data Management Program.”
Or, if a factory in your supply chain is shut down when poor worker standards lead to an event like the Rana Plaza collapse, not only is your reputation affected, but you’re likely going to lose shipments of critical materials, too. That means lost sales, further decreased profitability, and additional business continuity risks (which themselves lead to more financial damage).
Or, if you change suppliers only to discover that a shipment of your goods is heavily impacted by sanctions and/or tariffs due to its country of origin, it could hurt sales and ruin the profit margin for your end product.
These realities become too common when companies seek to address one concern (such as the presence of a restricted material) without considering other impacts. Regardless of what you’re shipping or importing, you need cross-topical data to assess the full range of risks present in your unique regulatory landscape.
You can’t manage siloed data and remain compliant in the global regulatory ecosystem. You need a system that can unlock and harmonize the data.
How Assent Supports Compliance
Assent helps the world’s largest businesses automate supply chain communication, enabling them to identify and mitigate financial damage resulting from bad data or a poor actor in their supply chain. This approach will deliver transparency and insight into your supply chain, reduce risk, and protect you from the gamut of reputational and operational penalties that will impact your businesses performance.
The Assent Compliance Platform, together with our due diligence expertise, automates outreach and education, so your suppliers understand why you need their data. This will increase access to customers and markets, improve profitability, and protect future investments and sales.
For more information about how Assent can help durable goods manufacturers meet supply chain risk management requirements, as well as your internal standards, contact our experts.