Complying with regulations is an onerous and time consuming task, especially for small and medium-size businesses. Any business has to address worker health and safety regulations, and manufacturing companies additionally face regulations related to the products they make. Do companies really need to pay attention to practices that aren’t yet mandates?
Absolutely. Why? Because chances are, many of these “nice to have” practices eventually will become mandates. Let’s take an example from the food industry. Pro-active companies, such as KFC, were phasing trans fats out of their recipes before they were banned in areas such as New York City. McDonald’s—which was slower on the uptake—got a ton of bad publicity until it banned the substance from its foods.
Manufacturers face a similar situation when it comes to “green.” Companies such as GE have read the writing on the wall and are capitalizing on their environmentally-friendly products and practices now—before energy-savings and other green mandates become the law.
The business consultancy, The Aberdeen Group, recommends companies take a proactive approach in meeting or exceeding existing standards. These “best-in-class” companies:
· Have 90 percent or more of their products in compliance with standards, compared with laggards, who have 10 percent to 40 percent of their products in compliance
· Have 53 percent fewer stop shipments than other companies, protecting their product flow and revenue streams
· Have 35 percent fewer stop shipments than other companies, resulting in fewer recall costs, less customer disruption and a secure brand image
In terms of the environment, two European mandates– the Restriction on Hazardous Substances (RoHS) and its Energy-using Products (EuP) legislation–are already being used as guidelines for environmental programs in other countries, including China and Korea. Some U.S. states as well as Canada have similar proposals on the books. The Green Supply Line site outlines these mandates and their compliance requirements.
In our next blog, we’ll take a look at the steps Aberdeen and other experts recommend companies take to meet and exceed environmental standards.