Mastering challenges: Time to Market & cost pressure
A frequently voiced concern of our interviewees, especially managing directors and purchasers, is the time and cost pressure when developing and launching new products. Product compliance measures, it is assumed, delay the market launch and increase the purchase prices for products or components.
And of course this is partly true. Negotiations with suppliers can take longer due to additional requirements for material tests, certificates and other documents. And suppliers are willing to pay extra for these often mandatory tests - often from several customers at the same time. Chemical tests on materials and components or the testing of electrical items or toys can easily cost a five-figure sum.
Avoid delays
The only way to avoid delays in the market launch is to include the compliance management requirements in the negotiations at an early stage and make them a central component of the cost calculation and the final order. The product-specific compliance requirements should be communicated to the supplier as early as the first request for proposal, especially in the case of new suppliers.
It should also be clearly communicated which tests and documents must be delivered at what time and which requirements they must meet. This approach reduces the number of unsuitable suppliers and saves valuable time when selecting produc
Human resources for the organization of product compliance management
Organizing product compliance management, creating technical documentation and checking suppliers' documents also requires human and therefore financial resources.
In our experience, with 1,000 products and 3 deliveries per year, a company would have to check more than 50,000 documents, not to mention the associated inspection and testing costs. As a rule, this is hardly feasible with the available resources and is also not economically reasonable. If a serious document check takes 3 hours per product, you need two full-time employees who do nothing else for a year.
Economical product compliance management
However, budgeting too little or no costs for compliance with legal requirements can have consequences that threaten the company's existence, ranging from fines, sales bans and product recalls to potential prison sentences for managing directors or divisional managers. (Link to the risks)
The only way to achieve clever and cost-effective product compliance management is a risk-oriented approach and creative product range, product and supplier screening. Companies should ask themselves the following 8 questions:
- How dangerous are my products and what damage could they cause (explosions, fire, electric shock, chemical risks, ...)?
- Which groups of people could be affected (children, senior citizens, people with disabilities)?
- What quantities of which products do I sell?
- Which products are made from the same materials and which products can I consider together?
- Which products come from which suppliers?
- Which suppliers can I rely on and which not?
- Which products do authorities pay particular attention to?
- What product compliance risk am I prepared to bear and what budget do I have available for this?
Solution approaches from trinasco
In our Product Compliance Process Consulting workshop, we discuss precisely these questions with you and show you ways in which you can quickly reduce your product compliance risk with limited time and financial outlay. Or you can save money by using us as your outsourced product compliance department.
