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5 minute read
Navigating the landscape of regulations and compliance standards is an unavoidable reality for manufacturers. With varying requirements in different regions and industries, the challenge lies in effectively managing these complexities. One approach to addressing this challenge is the implementation of compliance management systems (CMS), which serve as structured frameworks for ensuring adherence to legal obligations and industry standards. By integrating compliance considerations into the product roadmap, manufacturers can ensure that all teams are aware and informed, enabling proactive management of regulatory requirements throughout the product development process.
Varying Levels of Regulation
Each market a company operates in will have different regulations and standards that companies will need to follow. In fact, global leaders in manufacturing will take this a step further and raise all their facilities and operations to the level of the market with the highest standards. For example, with health and safety, just because one region is less stringent than another doesn’t mean companies should put their workers at risk for the sake of the lowest compliance level.
In other cases, such as environmental, social, and governance (ESG) standards, companies need to balance meeting the local regulations and their ESG goals. This may result in the company raising its standards to meet the market they’re operating in or meeting its goals because the regional standards are lower than the company’s targets.
Industry Standards
Different industries will have a set of standards that all companies are expected to uphold. These can relate to the quality of the products, the materials used within the products, and how parts are made, assembled, or disposed of. Not meeting industry standards can negatively impact the reputation of a company. On the positive side, some industries have official seals or stamps of recognition they award companies who exceed the standards, which boosts the reputation of those leading businesses.
Health and Safety
Manufacturers encounter various health and safety regulations to protect workers, consumers, and the environment. These regulations can vary depending on the region, jurisdiction, and specific industry. Some of the most common regulations involve the following:
- Occupational Health & Safety
- Hazardous Material Handling
- Personal Protective Equipment (PPE)
- Machine Safety Standards
- Electrical Safety
- Fire Safety
- Noise and Vibration Limitations
- Environmental
These are just a few examples of the health and safety regulations that manufacturers encounter. Meeting these standards is essential to protect the health and well-being of employees, prevent workplace accidents and injuries, and maintain legal compliance.
Government Policies
Global companies encounter a wide range of government policies and regulations that can affect their operations, including production processes, product safety, environmental protection, trade, taxation, and labor practices. Here are some common government policies and regulations that manufacturers may encounter:
- Product Safety
- Environmental
- Trade Policies and Tariffs
- Labor Laws
- Intellectual Property Protection
- Healthcare and Employee Benefits
- Export Controls and Sanctions
Meeting these regulations is essential for maintaining legal compliance in each region a company operates in, and it’s just good business. When companies ensure product quality and safety, protect the environment, protect public health, and foster sustainable and responsible business practices, they’re more likely to gain consumer confidence and trust.
Social Pressures
Manufacturers also face a range of social pressures, depending on the markets where they operate. These social pressures arise from societal expectations, consumer preferences, advocacy groups, and broader cultural trends. They can influence business practices and operations as well as lead to changes in government policy, which is why there is usually an overlap between these standards and official government policies.
Here are some common social pressures that manufacturers may encounter:
- Sustainability and Environmental Responsibility
- Ethical Sourcing and Supply Chain Transparency
- Diversity, Equity, and Inclusion (DEI)
- Product Safety and Quality
- Corporate Social Responsibility (CSR)
- Consumer Preferences and Trends
- Labor Practices and Employee Well-Being
- Community Engagement and Stakeholder Relations
In some cases, these social pressures can influence the strategic decision-making of large companies. They may want to align their business operations and adjust their corporate values to match the values of their consumer. Adapting to these pressures can lead to competitive advantages, improved brand reputation, and long-term sustainability.
The Basics of an Effective Compliance Management Program
Management systems and frameworks help large organizations streamline and organize their teams, facilities, and operations to consistently meet standards across the company. This applies to everything from the activities on the manufacturing floor to the prioritization of product ideas to compliance management of each product line.
Manufacturers need to have some type of compliance management system (CMS) in place to confirm they are achieving the following:
- Meeting internal standards of excellence
- Complying with government regulations
- Surpassing industry standards
- Upholding ethical standards
- Maintaining legal obligations
- Achieving internal ESG goals
Companies implementing a CMS should include the following elements.
Policies and Procedures
Global manufacturers operate in many different markets. These large companies must balance varying compliance standards and be able to communicate these differences with their relevant teams. Employees within these organizations cannot be left to guess or interpret the right path to take; otherwise, compliance will not be met.
The most efficient way to keep everyone informed and aligned is with clearly defined policies and procedures. These guidelines provide an overview of the company’s commitment to certain regulations and the steps each team needs to follow to ensure regulations are met.
Risk Assessment
In addition to policies and procedures, large organizations must assess the potential risks associated with non-compliance. In some cases, the consequences can be enough to stop production. In less severe cases, non-compliance can result in fines, new iterations of a product, or facility upgrades. Compliance teams will prioritize the risks based on their likelihood and impact, which helps allocate resources effectively to address any high-risk areas of the organization.
Training and Education
Policies and procedures are essential, but staff members require more information than a series of paperwork to read and sign. Employee training programs are a great way to ensure that staff members understand the compliance requirements and the important role they play in maintaining compliance.
When employees understand the consequences of non-compliance, they’re more likely to be on board with following internal procedures. Training sessions can cover various topics, including data privacy, health and safety standards, anti-corruption laws, and industry-specific regulations.
Compliance Culture
Cultivating a culture of compliance is essential for the success of a CMS. What does this mean? Creating a company culture that values compliance requires leadership buy-in as well as fostering an environment where employees prioritize ethical conduct, innovation, integrity, and accountability in all their actions.
Monitoring and Auditing
As with any goal, monitoring, tracking, and measuring are essential activities to ensure the goal is achieved. To meet regulations and manage compliance, organizations need to conduct periodic audits to evaluate the effectiveness of the CMS.
Monitoring involves real-time tracking of activities to identify deviations from compliance standards, while audits provide systematic reviews of processes, controls, and records to ensure compliance.
Documentation
A compliance management system usually includes mechanisms for reporting compliance issues, such as incident report systems and whistleblowing hotlines. In these cases, documentation is vital. Maintaining reliable records of compliance efforts, audit findings, corrective actions, and communication helps organizations do their due diligence and minimize their risk.
Compliance Reviews and Updates
Compliance management is a continuous process that needs routine reviews and updates to adapt to changes in laws, regulations, and business operations. Regular reviews ensure that the CMS remains effective and relevant.
Implementing an effective compliance management system not only helps organizations evade legal penalties and reputational damage but also fosters trust with stakeholders, enhances operational efficiency, and promotes sustainable business practices.
Using Agile Roadmaps to Track Compliance Requirements
It’s essential to keep your compliance, legal, and quality assurance teams informed that products must pass a set of requirements, but what about during the development phase? How do you ensure that your engineers, designers, and product managers understand these requirements at the planning and development phase? One answer is to use the product roadmaps.
Adding compliance reviews as milestones on the product roadmaps helps ensure that all product stakeholders know these important events are coming up. It also ensures they are focusing on meeting those targets, rather than delivering a product iteration that won’t pass the test, and having to fix the problem after the fact.
Agile product roadmaps also make it easier to adjust and improve a product when an iteration doesn’t meet the requirements or when regulations change without much warning.
Schedule a demo of our agile product roadmap software to see how the right tools can help keep your organization Agile.
