A Product Compliance Risk Assessment (and Warning)
You (or a client) are in post-production with a new CPG product. It’s 4:30 on Friday, and everything is going smoothly. Demos are done, signage is hot off the presses, and you’re getting ready to launch in two weeks.
The phone rings. You find that a policy change six months ago had disqualified your new product from being sold in the US. You’ll spend the coming weeks trying to determine what to do with the 10,000 now-worthless units heading your way, already halfway across the Pacific.
Welcome to a compliance nightmare.
“Compliance” commonly refers to aspects of product safety and quality requirements. The definition of compliance often varies, based on which authority is enforcing the regulation. Here are some common regulatory bodies:
- Retail customer
- Federal government
- State and local governments
- Certification bodies
- Voluntary standards organizations
The regulations add up quickly.
Regardless of what you must do to have a compliant product, compliance is 100% necessary if you want to sell successfully – without recalls, fines, or lawsuit damages.
Because requirements are always changing, the question should not be, “Are we compliant?” Instead, ask, “How do we remain compliant with all local, state, federal, retail, and other regulatory bodies?”
It’s critical to stay fully up-to-date so that your company is producing a product your retailer and the end consumer will not reject.
Such imperative details need to be sorted before the first lot/batch is off the production line – if not earlier in the product development cycle. Compliance needs to be a factor every step of the way:
- Product concept and design
- Risk assessments
- Product qualification
- Supplier qualification audits
- Incoming raw materials
- Quality assurance process and controls
- Proper documentation for CBP inspection
Sometimes a retailer’s programs, policies, processes, and expectations for compliance are hard to find, and you may be unaware of them. Keep in mind that they may still exist!
If you’re not sure where you stand, you may not be asking the right questions of the right people.
Trust me – it’s better to be diligent in asking questions up front than take the risk of losing business, paying the costly penalties for shipping delays and store fees to remove products off the shelves, or even worse – damaging the reputation and branding of your company. The long-term negative impact on your business will be crippling – to say nothing of the initial costs.
Compliance can be overwhelming, so we’ve put together some hard-hitting questions for you to get started:
- Can you confidently provide a General Certificate of Conformity (GCC) or Children’s Product Certificate (CPC), as required by law for certain consumer products, within 48 hours of the request by Customs Border Protection (CBP) or your customer?
- Do you know how California Proposition 65 impacts the products being shipped to California? Do you know your customer’s expectations for California Proposition 65?
- Do you know which products require third party laboratory testing by law?
- Are you familiar with which products your customer requires testing for, and the testing frequency?
- Do you know what to do if you receive a failing test report from a third party laboratory?
- Do you have all the relevant and most up–to-date testing protocols and product specifications for your customers?
- Do you know what a sample seal is and when it’s required or most appropriate? How do you know for sure that the sample sent to the third party laboratory is a representative of what is/will be on the market?
- Do you know the most efficient way to ensure your products are in compliance without breaking the bank?
- What are you doing to ensure that your contracted factory or factories are continuing to do a good job? Are you having your own staff or third party regularly conduct pre, inline, and/or final-production inspections?
- Are you taking sufficient measures to ensure that your products continue to be in compliance until at least the end of the product lifecycle?
If you are unsure or unable to answer of any of these questions, then there is a good chance you need to do more to protect the best interests of your company. The costs of noncompliance are devastating, but the benefits of proper compliance are priceless.