Four Realities In the New Product Safety Supply Chain
By Donald Kornblet
Manufacturers, retailers, and importers have new responsibilities in the new era of product safety. Recent regulations and legislation around the globe have spelled out new product safety imperatives. There are some new ‘must haves.’ Companies should have identifiable and documented product safety processes. Companies must have appropriate testing and certification protocols. Companies need to develop more stringent traceability systems.
The opinions expressed in this piece are the author's and do not necessarily represent those of Product Safety Forum.
Product Safety Forum is a free service of Product Safety Letter. Its mission is twofold: to promote frank and open airing of product safety issues and to provide advice and guidance from top experts in the field.
Do you have an idea or article you think would make a great piece for Product Safety Forum, including commentary or reaction to this one? Then email Publisher Sean Oberle to discuss it..
In short, companies at every stage of the production process have new areas of exposure resulting from newly defined responsibilities.
What many companies are realizing for the first time is that being part of the supply chain means being a part of the product liability chain. A law suit against an OEM can very quickly boil down to what a supplier did or didn’t do. The wrong verdict may be an inconvenience to the OEM, but has the potential to put the supplier out of business; or vice versa. Companies that make products for other companies now own some measure of the product liability associated with their role in the production chain.
What this means is that a supplier should, but often may not, have as rigorous a product safety process as the most sophisticated OEM or global retailer.
Here are four new realities that face business, whether an OEM or a supplier to an OEM in the new product safety supply chain.
Reality #1:OEMs should and are setting more rigorous product safety criteria in their selection of suppliers.
In some cases this criteria includes demonstrated effectiveness in quality control systems. Understanding product safety requirements is no longer an option for suppliers that want to do business with manufacturers; it’s a necessity. Suppliers need to demonstrate their compliance to regulations through documented plans and adherence to conformity measurements. The supplier with a faulty testing program is an ‘emperor without clothing’ in the new era of product safety.
Reality #2:Suppliers need to have a product safety system in place that mirrors in form and substance the product safety systems in the most sophisticated manufacturers.
Suppliers need to have a product safety process that includes a hazard analysis protocol, along with a warnings and instructions component. They need to have well documented product safety processes, and be able to demonstrate to their customers the steps they have in place to protect against having hazardous products or materials passed on to them and finding their way into the consumer market. OEMs are more insistent on having supplier product safety assurances as a “cost of doing business” with them. The new business reality is that a supplier’s diligence, or lack thereof, may become a factor in a subsequent litigation.
Reality #3:Suppliers need to have their own criteria for their suppliers that demonstrate they operate in conformity with applicable product safety regulations governing their own industry, as well as their customer’s industry.
If a supplier allows a banned substance to creep into their product, the OEM may own the legal responsibility, but the supplier will be called to account in the end. Suppliers need to be as diligent in qualifying their suppliers as an OEM is. This includes having documented the required testing and certification for products and materials that go into the products they make and sell upward in the supply chain. Put another way, a supplier to another supplier has the capacity to threaten both of their businesses through sloppy product safety practices.
Reality #4:Every supplier is in the risk management business and needs to understand what that means.
Suppliers need to recognize that their risk management practices have a material affect on their own companies, as well as their customer companies. They need to do a risk assessment ‘inventory’ using professionally trained people so that they can document and validate with confidence the assurances that they provide their customers. More and more the language of today’s product safety world incorporates the role that the supply chain plays in reducing or increasing the risk that companies take. An effective program to manage risks can result in a product safety supply chain that benefits everyone, especially the ultimate consumer.
No one questions that dramatic changes in the product safety field have taken place in recent years. The stakes are higher and the circle of liability has expanded to cover many more businesses. The ground rules are shifting and still being defined. Companies are searching for certainty where little exists. What is clear is that companies need to pay close attention to the product liability and product safety consequences of their actions. What is also clear is that more and more the spotlight of accountability is shining on both the supplier and the OEM or retailer. Suppliers who don’t handle this responsibility well are threatening the long term viability of their company. The new product safety supply chain has this imperative: how you manage risk has great consequences for you and your customers.
Donald Kornblet is president of ADK Information Services LLC (www.adksafetyinfo.com which manages the Certificate in Product Safety Management course offered through the Center for Supply Chain Management Studies at Saint Louis University. He has managed product recalls for nearly 30 years and has a background in public relations, call center management, and business. E-mail your comments or questions to dkornblet@adkprg.com.
E-Mail This Article
Printer-Friendly Version
