Seven best practices to achieving higher levels of compliance

By Jim Brown

October 16, 2006

(Seven Best Practices to Achieving Higher Levels of Compliance :  Page 1 of 1 )

Manufacturing companies today are spending a significant amount of their scarce money, labor, and time addressing compliance mandates. A recent Aberdeen Group benchmark study, however, indicates an alarming number of these companies are still faced with low levels of compliance and high risk.

Yet, Aberdeen analysis also indicates that companies that are achieving the highest levels of compliance are spending roughly the same amount on their compliance efforts as other companies. The key to their success is not greater investment but better approaches to product compliance, not shared by their less compliant peers, that yield superior compliance without significant extra spending (see Figure 1).

Figure 1 (Source: Aberdeen Group, The Product Compliance Benchmark, September 2006)

Best Practices in Product Compliance

The report identifies seven key differences between companies that are best in class at product compliance and other companies. These differences are:

• Early and frequent compliance checking
• Product composition analysis and documentation
• Standardized compliance practices
• Centralized compliance organizations
• More frequent product content audits
• More frequent, broadly applied performance measurement
• More automation and superior compliance infrastructure

Best-in-class companies, which Aberdeen Group defines as those with a greater percentage of their products in compliance, are much more likely to have adopted the approaches listed here. In consequence, they are enjoying fewer disruptions to their business ý resulting in less impact on revenue and customer satisfaction and lower regulatory risk.

In fact, these leading companies are experiencing substantial benefits:

• 90% or more of their products are in compliance, as compared with laggards (the bottom 25% of performers), which average 10% to 40% of products in compliance
• 53% percent fewer stop shipments than other companies, protecting their product flow and revenue streams
• 35% percent fewer product recalls than other companies, resulting in lower recall costs, less customer disruption, and secure brand image

Key Challenges

Top performers are achieving these results despite the increased complexity of recent regulations such as the European Union's Restrictions on the Use of Certain Hazardous Substances in Electrical and Electronic Equipment (RoHS) Directive.

 Page 1 of 1