As the world navigates disrupted global supply chains and an ever-expanding regulatory landscape, companies need to keep their focus on the consumer. Those consumers care not just about what’s in the products they buy, but also how product manufacturing might be impacting the world around us.
What strategies and tactics are your peer companies using to pursue product compliance and continue to delight consumers?
This was the focus of the opening keynote at the recent Veeva Quality & Regulatory Global Summit. Michael Roemer, senior partner and managing director with global management consulting firm Kearney, kicked off the Summit with a discussion of how, when done right, product compliance can be a competitive advantage.
Product Compliance is a Billion-Dollar Threat
Eighty percent of C-level executives are not aware of the risk and the opportunities of product compliance, Roemer said. In addition, companies struggle with how to set up an end-to-end compliance management system.
But with product compliance becoming an ever-increasing issue that can have a major impact on the bottom line, the question becomes how to make sure your company is compliant amid a changing regulatory environment.
“There are various stakeholders who have rising expectations,” Roemer said. “In the past, this was mainly driven by requests from authorities. Now even customers are putting higher pressure on your business, and that can have an immediate effect on your company's success.”
How Must We Approach Product Compliance Now?
Companies face two types of challenges when it comes to providing information regarding product compliance requirements.
First, regulators may have very different questions about very specific information on a company’s products, and they expect an immediate response on information that is often not available. They request data points from various organizations in different departments that are typically not talking with each other. Because those requests are increasing, the complexity of maintaining that information is increasing as well.
Second, the number and types of questions that customers are asking present another challenge.
“The workload of product compliance is increasing significantly,” Roemer said. “Also increasing is the way you can actually lose a competitive advantage as regulators and customers request more transparency on your product secrets. This is a pressure that’s growing across all industries.”
What Does Product Compliance Success Look Like?
Based on its product experience over past years, Kearney has developed a model by which a company can be compliant with what its stakeholders require. Under that model, eight dimensions need to be addressed:
- Values and culture – Compliance needs to be embedded in the fabric of your organization.
- Objectives - A written handbook clearly defining what you expect from your organization to deal with regulatory compliance.
- Communication and training – A communication plan and curriculum for general and specialist product compliance training.
- Program and processes – Tailored, end-to-end processes to ensure product compliance.
- Technical infrastructure/IT – IT infrastructure to digitally document compliance adherence.
- Organization and governance – Dedicated organization units on all lines of defense and clear roles and responsibilities.
- Risk management – Systematic and regular processes to identify and evaluate all potential product compliance risks.
- Monitoring and improvement – KPIs for regular monitoring of Product-CMS. performance and definition of continuous improvement measures of that performance.
“If you cannot provide evidence that your compliance management system is effective, even if it's nicely documented, any auditor would say it is not operating,” Roemer said.
How to Set Up an Effective, End-to-End Product Compliance System
There are 3 'must get rights' to be effective in establishing a product quality compliance system, Roemer said.
- Embedding it in your existing compliance management system
- Measuring the impact of those 8 elements
- Embedding it along the end-to-end value chain
“Embedding it along the end-to-end value chain is a complex topic where a lot of communication is needed among different stakeholders,” Roemer said. “Typically, these are departments that have not talked to each other on similar topics in the past,” he said. “We've seen a lot of silo mentality and a lot of redundancy. The product compliance management system will help drive efficiency as well as productivity in handling compliance requests.”
Leveraging a Proven Platform
Compliance is complex, not only because of the sheer number of initiatives that are needed to get the process in place, but also because it requires connecting so many different parts of the organization. So much of the data compliance managers need to have resides in different databases and legacy systems that need to be connected to establish an efficient workflow.
“Now the question becomes, as product compliance is a billion dollar threat, how to make sure your company is compliant to a changing environment and regulations,” Roemer said.
That complexity doesn’t need to be an obstacle to compliance success, however, thanks to Veeva’s Vault platform and its software solutions. Veeva Vault enables companies of any size to easily establish communication across a wide variety of disparate systems to aid in achieving adherence to international standards.
“If you have an end-to-end solution that already works, like what Veeva provides, you can build up your product compliance management,” Roemer said. “It makes life much easier to be able to connect your legacy world into an established, proven system.”