Sep 7, 2024 2:02:14 AM

Understanding Compliance Issues in Manufacturing

Compliance with regulations and laws lies at the base of any business in the manufacturing industry. It provides the legal framework for ensuring the safety of products for consumers as well as the employees who make them. As such, industries and organizations exist to support and deliver documentation, training, and certifications of compliance. These regulations provide the legal framework to ensure the safety of not only the products being made but also the employees who produce them. Failing to comply with these standards can have severe financial and reputational consequences for a company.

To maintain certification, it is exceptionally important to have the means for properly tracking all aspects of work-in-process (WIP), data collection, facility maintenance and equipment performance.

What Is Compliance in Manufacturing?

Compliance is an integral part of every business. Manufacturing compliance includes a broad range of both corporate and regulatory compliance procedures that protect businesses and consumers from risk.

Compliance is a multifaceted concept, covering both regulatory and corporate requirements. Regulatory compliance involves adhering to laws set by governing bodies such as the Environmental Protection Agency (EPA), Food and Drug Administration (FDA), or Occupational Safety and Health Administration (OSHA). These agencies enforce standards for environmental protection, product safety, and worker health. Corporate compliance, on the other hand, focuses on internal company policies that often go beyond the legal minimum to protect the organization from risk. International companies, for instance, may adopt stricter standards across all their locations to account for variations in local laws.

For manufacturers, the challenge lies in managing compliance across a wide range of areas—from product safety and data protection to environmental regulations and export controls. Each of these areas carries its own set of requirements, and overlooking even minor compliance issues can lead to significant setbacks.

Regulatory vs Corporate Compliance

Regulatory compliance involves following legal mandates and legislation set by governing bodies such as the Environmental Protection Agency (EPA), the Food and Drug Administration (FDA), the Occupational Safety and Health Administration (OSHA), the Securities and Exchange Commission (SEC).

Corporate compliance is when a business follows not only state and federal-level laws, but also internal policies. Often what is acceptable and legal in the United States might not be permitted in Germany; therefore, an international company may adopt the most stringent policies across the board.

The Stakes of Non-Compliance

In manufacturing, non-compliance can have wide-ranging effects. Financial penalties are just the beginning. Regulatory agencies have the power to revoke licenses, halt production, or impose restrictions that can severely hamper your ability to operate. Beyond the financial consequences, non-compliance can result in a damaged reputation, making it difficult to retain employees, customers, and investors. The ripple effects from a single breach can be long-lasting, harming everything from profitability to operational efficiency.

Moreover, non-compliance can disrupt your entire supply chain. Whether it's a delay in a critical shipment due to unmet export requirements or a stop-work order following a safety violation, these interruptions can affect your entire production cycle. In highly regulated industries like pharmaceuticals, automotive, and food manufacturing, the cost of compliance failures can escalate quickly.

Key Areas of Manufacturing Compliance

There are several critical areas where manufacturers must ensure compliance. Some of the most important include:

Anti-corruption: Ensuring ethical practices in every business dealing.
Data Protection: Securing sensitive company and customer data against breaches.
Employment Law: Following labor regulations, including worker safety and fair wages.
Export Controls: Complying with international trade regulations.
Health, Safety, and Environment: Adhering to safety standards that protect both workers and the environment.
Product Safety: Guaranteeing that manufactured goods meet legal safety standards before reaching the market.
IT Safety and Security: Protecting manufacturing systems from cyber threats.

Each of these areas presents unique challenges. For example, maintaining compliance with environmental laws often requires constant monitoring of emissions, waste disposal, and resource usage. Similarly, product safety compliance demands rigorous testing and documentation throughout the manufacturing process to prove adherence to legal standards.

Why It’s Crucial to Stay Ahead of Compliance Issues

Addressing compliance issues proactively is far more cost-effective than reacting to a breach. Non-compliance penalties often come with financial costs, but they also carry the risk of lost business opportunities, diminished customer trust, and even operational shutdowns. By investing in compliance management, manufacturers not only protect themselves from regulatory fines but also improve their overall operational efficiency and competitiveness.

A comprehensive compliance strategy serves as a safety net for the business. It minimizes risks, ensures smooth operations, and allows businesses to build trust with stakeholders. Clear communication about compliance measures also fosters a better work environment, where employees understand the rules in place and have confidence in the organization’s commitment to safety and ethical practices. In short, maintaining compliance helps to keep operations running smoothly, avoid costly interruptions, and enhance a company’s reputation in the marketplace.

Equip Your Team with the Right Tools

To maintain compliance, businesses need to not only put processes in place, but be able to pass the audits of regulators and certification organizations. Even better, businesses need to be able to extract the necessary data quickly during those audits versus preparing for days or even months ahead of time.

TME^® MES/EAM/CMMS/WMS software solution is a single, cost-effective platform that enables your business to consolidate and report on complex data while simultaneously coordinating manufacturing processes, equipment and personnel. Track and monitor all components, raw materials, equipment, and tools to ensure compliance with the highest quality, security, and performance guidelines at each step in the manufacturing process. By giving you 24×7 visibility into all facets of your operations and across the entire supply chain, TME^® can help you improve operational efficiency, quality output and cost-savings while meeting regulatory compliance and safety standards.