Consumer advocacy groups have become more and more vocal in recent years in their quest for more transparency. Retail chains have begun to hear the collective clarion call. For instance, Wal-Mart recently joined the Chemical Footprint Project, which encourages companies to disclose the chemicals in their products. Similarly, in January 2017, Target declared it would use its market influence to push for full ingredient disclosure throughout its entire value chain by 2020. As Bloomberg reported last November, the Safer Chemicals, Healthy Families coalition, which runs a program called Mind the Store, gave Wal-Mart an A- for its chemical disclosure policies while Target earned a B+. However, some big-name retailers on its list didn’t do nearly as well.
When considering the chemicals contained inside the dyes, solutions and materials that make up household and workplace goods, even the simplest products can cause complex problems for tracking all the chemical substances they include.
Unilever, which makes products like Dove soap and Axe body spray; S.C. Johnson & Son, which markets items such as Glade air fresheners; and Procter & Gamble (P&G), which supplies goods such as Tide laundry detergent and Herbal Essences shampoos, all have said they plan to disclose full ingredient lists in many of their products in the coming years.
“Our goal is to give people information that is clear, reliable and accessible. This is another step in our sustainability journey toward enabling consumers to make informed choices,” explained Kathy Fish, P&G’s chief technology officer, in a news release about the company’s move toward more transparency. “This will build even greater trust in the quality and safety of all of our products,” she added.
Delivering On The Promise
Greater transparency requires a solid data-collection strategy to help a company achieve a higher level of satisfaction and peace of mind. An organization simply can’t afford to delay any longer addressing all the rules and regulations to which it must adhere.
It’s no secret that the world of regulated materials has become much more complex. Consumers, industry groups and regulators are imposing additional scrutiny on manufacturers and the process industries. A great example is a recently introduced proposal by European Chemicals Agency to restrict hazardous substances in tattoo inks and permanent makeup. As the agency explains on its website: “The aim of the proposal is not to ban tattoo inks or tattooing. Instead, the aim is to regulate specific hazardous substances present in tattoo inks so that they are safe for people.”
The concern isn’t only about what chemicals are present in the products we use and the foods we eat, but also about the chemicals involved in making those products — and, if chemicals still are present, whether they pose a risk. For example, ammonia regularly is used in food processing. Although ammonia has been declared safe in small amounts, it’s worth evaluating whether all the potential health risks have been identified and communicated.
The question remains: How can we take a more-proactive approach to chemical management, and what are the best practices we can employ to help us create a healthier and safer world? There’s no simple answer but part of the solution requires incorporating health/risk/compliance assessments during the innovation cycle and avoiding the nightmare of recalls or — worse — lack of consumer interest or apathy toward a product.
Product Lifecycle Challenges
Product sustainability is a hot topic for the process industries, especially for makers of consumer goods. However, most companies still resort to testing only after creating a product. Taking this approach during market rollout limits an organization’s options and can necessitate a costly remedy. According to a recent estimate from the Food Marketing Institute and Grocery Manufacturers Association, recall of a food-related item incurs on average $10 million in direct costs, as well as brand damage and lost sales. In one particularly eye-opening outlier, U.S. peanut butter makers lost $1 billion in collective sales and brand damage after a 2009 recall for salmonella concerns. The reality is that product sustainability benefits from a compliance check at each stage of the product lifecycle (Figure 1).
Let’s take a look at key issues during the product lifecycle and how product compliance can become part of the overall product sustainability process.
1. Concept and design. Here, a company must identify constraints on a global regulatory basis and for each intended use. Product compliance at this stage helps an organization avoid costly last-minute product reformulation or repackaging by understanding the regulatory business risks associated with material composition based on the intended use. This also is the time that the firm should create a detailed plan for disposal at the end of the product’s lifecycle.
The key to success here is collecting all information in a standardized, auditable format. This will ensure the information can be captured and reused in other formats as requirements evolve. It’s also important to implement and deploy information technology systems that are flexible and on-demand to improve investments. The challenge is to resist a “not invented here” and a “we’re unique” attitude.
2. Sourcing and procurement. Once a product is conceptualized and designed, the company must source sustainable and compliant raw materials from suppliers. At this stage, capturing important information on each material sourced, typically via a supplier declaration, is crucial. Regulatory compliance in the European Union’s REACH legislation for articles or preparations requires this type of information.
Collaboration is essential between procurement and regulatory teams; this demands implementing automated compliance-based purchasing workflows as well as continually managing supplier risk. A company will gain enhanced visibility and control over supplier and material information, resulting in operational cost reductions.
Educating the supplier on why the disclosure is necessary for optimal product sustainability is key to achieving material declaration (the disclosure of the types of substances a product contains) from the supplier during the procurement process. In addition, the product stewardship team must work closely with the materials purchasing team to integrate disclosure as part of the conditions of purchase. Confidentiality will be an important factor and will require greater partnership with suppliers because certain ingredients are proprietary or trade secrets; some suppliers may choose to withhold specific identification, disclosing instead hazards and regulatory status.
3. Preparing the product for its destination. The production phase is all about “go to market” readiness. Proper product safety information and labeling require identifying all hazardous and controlled materials. What makes things even more challenging is the possibility of scaring off customers who are not used to seeing the full laundry list of chemicals in their products.
“We joke sometimes that we’re selling labels right now; we’re not selling products anymore,” says Jennifer Howell, senior manager of regulatory affairs at FONA International, a flavor company based in Geneva, Ill.
With those more-detailed labels comes potential confusion.
“For example, lemon oil contains limonene,” Howell explains. Seeing “limonene” on a label could raise concerns about chemicals in their food in people who don’t understand that it naturally occurs in lemon oil. It’s kind of like the unease that might arise from saying C6H12O6 instead of sugar on a label.
When considering the balance of proper disclosure and labeling, employ advanced software solutions that excel in areas where traditional Excel spreadsheets don’t.
Additionally, when rolling out a product, timing is imperative. Improper substance tracking strategies in place can lead to expensive and extensive delays.
The company must harmonize documentation across all geographic locations where the product is sold and, in most cases, provide the information in local languages, while preserving product branding and corporate identity standards. This completeness has placed an increased demand on a manufacturer to give accurate, detailed information about its products and the potential consequences; this only is possible with automation and standardization. An organization with worldwide distribution channels must ensure regulations are met prior to shipping. Having a central system that provides the ability to view and print safety documents on demand, from any geographic location, for customers, employees, authorities and transportation personnel via a secure website is the most effective mechanism to ensure global compliance.
4. Ongoing supply chain communication. Manufacturing and process companies today are part of an extensive global supply chain spanning many industries and regions. The reality of such an interdependent environment is that members of a company’s supply chain greatly affect its compliance and sustainability.
Once a product is introduced, the ability to track goods through all stages of the supply chain is paramount. The key to an effective traceability system is good communication and management between the successive links throughout the chain.
Electronic communication is a must to ensure traceability and track follow-up activities to meet business and regulatory requirements and deadlines. FONA, for one, is tracking ingredients using a blockchain. This basically consists of a decentralized database that is continuously updated with digital records. It’s visible to anyone in that network. When a transaction takes place, the information is grouped together and protected, creating a chain of custody throughout the supply chain with relevant information that can’t be modified.
Consider, for instance, a pineapple that was grown in Brazil but whose flavor goes into juice sold in the U.S. Blockchain technology enables complete traceability from the picked fruit to the drink sitting on the store shelf. While only an interesting concept right now, it could be a game-changer for chemical transparency down the road.
In addition, having dashboard views and advanced reporting capabilities will allow a firm to see the impact of raw material changes, the addition of a substance to a regulator’s SVHC [substances of very high concern] list or the complete replacement or substitution of a raw material. The built-in interrelations among products, raw materials, substances and uses dictate the sequence of communication within the supply chain. An effective automated supply chain communication system should be able to determine what needs to be communicated and confirmed with both customers and suppliers.
A Clear Case For Transparency
Implementing compliance into the product lifecycle is an ongoing process — and one not without its bumps in the road. At the core of any product compliance solution is regulatory content. Without accurate data, achieving true product sustainability isn’t possible.
In this information age, structured and centralized material information driven by product compliance is the key to safe chemicals management. A company excelling at procuring, maintaining and diffusing data to stakeholders will be more efficient in developing the right products the first time, and will be able to tap into its data mine to fuel innovations. Transparency and compliance also are essential for making customers happy.
A 2013 report from The Regeneration Roadmap found that 88% of respondents thought “ingredient transparency is ‘extremely important’ or ‘very important’ for companies to address as part of their products, services or operations.” Moreover, 82% said transparency was important for food and beverage purchases as well as beauty, personal care and household items.
Additionally, a 2016 report from Label Insight, “How Consumer Demand for Transparency Is Shaping the Food Industry,” found that 37% of consumers would “be willing to switch brands if another brand shared more detailed product information that they could understand.”
The entire value chain is responsible for the compliance of substances and finished products. Staying abreast of chemicals under scrutiny for regulation is every company’s responsibility; discussions at nongovernmental organizations, industry associations, etc., can prove enlightening. Sophisticated communication and traceability tools are essential to engage with supply chain partners as part of the extended chemical management team.
A company making product compliance a strategic initiative, designing sustainable substances at the beginning of the product lifecycle, planning for a sustainable retirement and working with compliant supply chain partners will ensure consistent and efficient decision-making and achieve a much higher level of performance across all facets of its business.
The final question remains: Are you committed to substance compliance? In today’s day and age, you can’t afford not to be.
FRANK ARCADI is vice president, product stewardship, for Sphera Solutions, St. Laurent, QC. FRANCIS TRUDEAU is product manager, product stewardship, for Sphera Solutions in St. Laurent, QC. Email them at FArcadi@spherasolutions.com and FTrudeau@spherasolutions.com.