It’s one thing to talk about product compliance in the abstract. It’s quite another to manage day-to-day compliance in the field.
Challenges companies face when implementing a compliance program include ensuring standards are met across the supply chain, adapting to changing regulations in the countries in which the company and its suppliers operate, and recognizing the ways compliance can help gain a competitive edge.
These topics, and others, were on the minds of the executives who participated in the keynote panel of Veeva’s most recent Virtual Global Summit.
The Industry Experts Weigh In
After Kearney’s Michael Roemer delivered a foundational presentation on product compliance as a competitive advantage [read our recap here], he moderated a panel of four industry experts to dive deeper into the topic. The panelists were:
- Valérie Sieurin, SVP Global Head of Quality with British multinational consumer goods company Reckitt.
- Hanno Cappon, CTO of global health and nutrition company H&H Group.
- Aidaliz Maldonado, Vice President, Quality Center of Excellence with the cosmetics company Estée Lauder, and,
- Bettina Jackwerth. Director, Quality and Product Stewardship, Personal Care EU with multinational chemical company BASF.
The panel kicked off by exploring how customers consider product compliance when making a purchasing decision.
Why Consumers Value Product Compliance
Although certain products will have to comply with local legislation and regulations, as well as be safe for use and do what is promised, there’s a second level of compliance that gets to the quality of the product: Do you trust the brand? Do you expect the brand to have quality ingredients, quality manufacturing, and quality of delivery? Do you trust the brand that will provide the quality and the benefit that it promises?
The panelists agreed that these factors by themselves are important, but also raised additional considerations about the sustainability of what a brand represents. That includes the transparency of the sourcing of ingredients and the environmental impact of a product on the environment, as well as the bigger purpose of the company; what it does, what it represents, and how it contributes to society, to consumers, to the economy, and the planet.
"This is where I think a lot of companies have taken the lead to provide that level of transparency,” Maldonado said. “Certainly, we are seeing that in consumers wanting cleaner, greener products.”
Aligning End-To-End Stakeholders to Ensure Product Compliance
Of course, companies don’t operate in a vacuum. They work with partners up and down the supply chain, so it’s critical to keep everyone along that chain focused on compliance.
“We have a lot of our suppliers that we either have entered joint ventures with or are strategic environmental, social, and governance partners with,” Maldonado said.
“We have thousands and thousands of SKUs, and not everything is produced internally,” she said, “We rely on a very strong third-party network of manufacturers, so ensuring that they are meeting our standards is something we do on a day-to-day basis.”
In many cases, that requires partnering with suppliers to help them scale up their compliance and quality standards. As a result, there’s a shift occurring where supplier relationships are more strategic and less transactional. Suppliers are increasingly taking on the role of partners who support a company’s goals.
“A lot of the relationships with our suppliers or their partners are transactional, but it gets better and there are better partnerships if they become strategic,” Cappon said.
‘What is the purpose of our companies, our own company, and our suppliers' companies? What do we stand for? What do we want to bring to society and the economy?” he said. “What makes it even more powerful is if those strategic partnerships become innovation partnerships; not just to be compliant, but to innovate and to be better.”
Product Compliance as a Competitive Advantage
Product compliance is certainly important, but how can compliance help a company gain a competitive edge? They should start by expanding their product compliance strategy and plan beyond just regulatory and quality.
Most if not all businesses today have a clear purpose and strategy and something they stand for. They should try to translate that into principles they want to comply with, so that then becomes their internal compliance.
“I would say the first thing we need to do is to define the level of compliance the company wants to achieve with their products, whether it's a raw material supplier or whether it's a finished goods supplier, and talk to the suppliers,” Jackwerth said.
“Second, I would say if you want to go on a new path or if you are new in the area, partner up with your key suppliers and see how you can move fast in the direction you want to achieve,” she said. “And then simply do it.”
How Technology Assist Companies with Their Compliance Strategy
In today’s business world, a compliance strategy is nearly impossible to implement without technology. If a company genuinely wants to use compliance as a competitive advantage to be a first mover and enter markets faster, the only way they can do that is by leveraging technology.
Still, incorporating technology into the process can be complicated. How does a company implement a digital transformation to simplify the compliance process? With hundreds of markets in different countries, for example, and often even within the same country, there may be different jurisdictions that have different requirements. Many companies have thousands of SKUs, each with its own set of ingredients, and ever-changing regulations add to the challenge,
Technological tools, such as Veeva’s cloud-based software solutions built on its Vault platform, can help manage that flow of information. From process to discrete manufacturing to regulated services, or a combination of them all, Vault supports requirements across business units.
“Whenever we have a major regulation change, it's a big undertaking and managing things on spreadsheets just does not scale,” Maldonado said.
“Certainly not for a company like Estée Lauder where we've got thousands of products across hundreds of markets,” he said. “We wouldn't be able to be a market leader if we didn't use technology to be able to get there faster, consolidate information, and communicate with our partners better.”
Recommendations for the Product Compliance Journey
When it comes to offering advice for those seeking to refine their compliance strategy, it’s important to realize that, like any strategy, it’s going to require an investment.
Some of the returns on that investment may be short-term, such as a reduction in write-offs. Others may be longer-term and may not be easy to absorb when it comes to the P&L. Because of that, support must come from the top.
“The first condition of success is that compliance must be sponsored by the highest levels of your organization,” Sieurin said.
“The CEO and the board need to buy into it,” she said. “They need to be the sponsors of it because it does require a lot of activity and some investment. They need to set the tone that compliance is not an option.”
That support helps create a culture of compliance at all levels.
“And certainly, if you link your compliance standards to the overall purpose of the organization it's great to have champions across the organization,” Cappon said. “Have champions and then make them loud and make them drive and make them influence people and convince people to go for it. That becomes an internal motivator, and you become a better company with better products for consumers.
Joining an industry trade organization is sound advice as well. These organizations work with all the different industry and market regulatory agencies, and can tell you where they're headed. Companies are more powerful if they are bound together. As an industry, they can help shape regulation.
And of course, it can’t be overemphasized how important is the use of technology to help steer those processes, collect the data, and collaborate with both internal and external partners.
The Key to Success: Right Partnerships and the Right Technology
Companies around the world are achieving and managing compliance by working with technology partners that bring both the experience and the tools that help achieve success. Many of these companies chose Veeva as a technological partner.
Veeva Vault enables companies of any size, across any industry to extend, customize and control their end-to-end processes to achieve and ensure adherence to international standards. Veeva Vault’s unique ability to manage both content and data in a single platform enables organizations to quickly deploy powerful applications that manage end-to-end processes with related content, data, and workflows. Contact us to learn more.