The challenges faced by supply chains and the need to focus on short-term priorities have put CSR and sustainability efforts in the spotlight. Some companies have been struggling to maintain their path toward sustainability while adapting to the ‘new normal’. Others have taken the opportunity to rebuild and refocus on longer-term objectives and more sustainable supply chains.
‘In business, sustainability has become synonymous with credibility.’
In this context of a new normal, consumer preferences are also changing with an increase in the importance of social and environmental causes. According to a survey* by the IBM Institute for Business Value (IBM) in collaboration with the National Retail Federation (NRF), 6 in 10 consumers are willing to change their shopping habits to reduce their environmental impact.
To help companies in their sustainability efforts, API is launching a new series of sustainability webinars starting in November.
Stay tuned for more about our upcoming topics.
*Research study of 18,980 consumers in 28 countries
The uncertain ‘new normal’ we’re facing is forcing companies around the world to adopt strategies and contingency plans that address new practical challenges, such as the reduction of workforces and international travel restrictions. However, companies need to think about the effects these changes will have on their consumers and minimize any potential negative impacts on these important relationships. Ensuring the same levels of safety and quality while guaranteeing an efficient time-to-market is critical. The consumer products and retail industry is already changing to align with these issues through speed, cost reduction, and customer focus.
Most commonly cited reasons for changes due to COVID-19 in ‘Consumer Products and Retail’ industry
Source: McKinsey & Company, ‘The need for speed in the post-COVID-19 era – and how to achieve it’ survey, September 2020
But how to achieve a customer-centered strategy with an enhanced time-to-market while considering cost-reduction needs at the same time? Some of the elements required when workforces are limited and travel is restricted are:
Increased flexibility
Faster response
Complementary know-how
An Extension of Your Own Team
To support companies in their path toward the new normal, API is cooperating with brands and retailers’ internal quality and audit teams to complement them on-demand with a 360° approach to quality that provides optional solutions.
Our complementary technical support
API’s complementary technical support allows companies to benefit from additional support only when and where it’s needed with the flexibility to adapt as required. Some of the added value of our solutions include:
Complementary technical solutions related to quality management: larger capabilities + deeper and upstream support (eg., remote golden sample validation with techno-visualization to assist locally during the product development stage).
Extended geo coverage: delivering ‘A to Z’ services with dedicated support in areas where clients are not present and that are not easy not easy to travel to.
Additional expertise in specific product categories: complementary knowledge and additional areas of expertise
Interested in learning more about our specific solutions?
In the current context of travel disruption, the ‘normal practices’ adopted by many companies until now need to be reassessed. Brands and retailers must be present in factories in many cases to oversee requirements, including the evaluation of prototypes, the review of samples at the pre-production or production stage, and the selection of items for new collections. But how can companies achieve this given the current travel restrictions and without teams on-site?
Occasionally, factories can send samples to the quality teams closest to them or even to the head office. However, in most circumstances, this solution would be too costly and time-consuming. To facilitate a quick decision process and speedy time-to-market, API has harnessed the latest video technology to develop a series of remote solutions.
Assess and approve your pre-production samples live or utilize a critical eye on-site during product selection, guided by the latest technology by our team of experts
Our solutions AT THE INITIAL PRODUCT LEVEL include:
Product sample review and validation
Full and precise evaluation of prototype sample, engineering sample or golden sample
Quality check at early stage to allow further corrections and improvement
Collection review in showroom via video call at the moment of product selection:
Sample review
Conformity / non-conformity identification on mechanical issues
Risks & issues anticipation
Recommendations for amelioration
Some of the benefits of our remote solutions are:
Guidance by a team of experts on-site
Possibility to follow live, real-time events at factory / showroom through the latest technology
Quality and compliant products
Faster time-to-market vs. international shipments for approval
Support though all manufacturing stages
Thanks to our in-depth manufacturing knowledge and boots-on-the-ground experience, we guide you through the most critical decision processes and support you remotely with the latest technology. API puts our teams of experts at your disposal who specialize in different product categories to support all your needs remotely. Interested in learning more about how we can support you remotely with these or other solutions?
Increasing environmental pressure from governments and associations, and a more pronounced consumer preference for eco-friendly products, are making more and more companies aware of the need to speed up their sustainability journey.
68% of consumers rate sustainability as important Source: CGS’s 2019 Retail and Sustainability Survey
To help them in this way, ICS – Initiative for Compliance and Sustainability – brings to its members a set of common tools to mutualize their audits, contributing to the reduction of audit fatigue and sharing knowledge and best practices.
ICS is an international sectorial initiative that aims to enhance working conditions among the global supply chains of its member retailers and brands. ICS is composed of 48 multinational retailers and brands in the textile, retail, footwear, electronics, and furniture sectors.*
API is accredited to perform ICS social et audits environnementaux to help ensure that suppliers and their supply chains are aligned with the ICS Environmental Code of Conduct. The main areas covered include:
Environmental management systems (EMS)
Energy use, transport, and greenhouse gases (GHGs)
Water use
Wastewater and wastewater effluent
Emissions to air and ozone-depleting substances (ODS)
Waste management
Pollution prevention, and hazardous and potentially hazardous substances
Major incident prevention and management
A dedicated environmental team with hands-on experience
Experienced with ICS environmental methodology
Knowledge of supply chain environmental sustainability
Led by the head of sustainability with a doctorate in sustainability (PhD) and more than 10 years’ experience
Bilingual with a clear understanding of specific local challenges and global expectations
Daily assessments in factories worldwide
API can support our customers in their environmental journey with 360° expertise in process, factories, and products.
Interested in learning more about our ICS environmental solutions?
API is glad to be participating as a sponsor at the 2020 ICPHSO International Virtual Symposium. The event will take place on October 27–28, 2020, in conjunction with the European Commission’s International Product Safety Week.
The focus of this year’s international symposium is ‘Safely sustainable: exploring how the concept of sustainability is impacting and shaping consumer product safety.’
API Link™, API’s new online platform, introduces a few additional features this month. In addition to the functions already revealed such as a 24/7 overview of ongoing and finished orders and order tracking with key milestones, customers can now benefit from:
Final decision on orders in 1 click: release or reject your orders faster than ever based on relevant data
Report summary: at-a-glance overview of all your reports
Online reports: easily accessible reports shared with different parties in 1 click and archived in a single platform
Confirmation of quotations online
Customers, suppliers and factories can benefit from increased visibility over processes and order status through API Link™ user-friendly dashboards.
API is glad to be participating as a sponsor at the 2022 ICPHSO Annual Meeting and Training Symposium. The event will take place on February 14–17, 2022 in Washington, D.C. The four-day Annual Meeting and Training Symposium provides an opportunity for global health and safety professionals to participate in discussions that further enhance the safety of consumer products throughout the world.
Will you also attend the event? Book an appointment to talk to our team!
Visit ICPHSO’s website for more details about the event: https://icphso.org/
Household goods manufacturing and supply chain operations remain under significant pressure, forcing the speeding up of processes in some cases to meet tight deadlines. An increasing need for agility and flexibility has introduced new risks as well as shortcuts and vulnerabilities that can lead to compliance and regulations violations.
With the pace at which the many complex parts of a supply chain must move to keep up with changes and disruptions, brands and retailers should be working with suppliers that can guarantee reliable outcomes without compromising the integrity of their processes and products. Strong visibility and understanding of the supply chain and adequate supplier mapping are essential steps for avoiding quality and compliance situations that don’t go according to plan.
The most effective way to address these challenges is to map your suppliers by performing factory audits, identifying areas of risk ahead of time and ensuring you work only with the most reliable partners. A factory audit will make certain that your supplier can produce your product to your expected levels of quality without jeopardizing supply chain integrity or compliance in destination markets.
Factory audits also help assess the risks that may be present with a particular supplier and provide direction on how to manage those risks.
The decision to work with a particular supplier will ultimately be up to you, but a factory audit will mean your decision is based on a trusted risk assessment with a presented improvement strategy.
The criteria for selecting the right supplier will naturally vary and depend not only on international requirements and regulations but also on industry best practices and brand values and guidelines. For example, you may request that a supplier apply stricter environmental measures to ensure eco-friendlier processes and reduce their impact on the planet.
Our checklist sample takes you through what a brief assessment of your supplier’s quality systems might look like, and touch on quality management, social, and environmental compliance.
The checklist example covers three main sections and includes some of the more common points when evaluating supplier performance in these areas:
The following guidelines can be followed for each process:
N/A: Process not available or not evaluated.
0 – Major non-conformity: Absence of procedure or proof of significant discrepancies in implementation. Corrective action will be designed for this process.
1 – Minor non-conformity: Incomplete procedure or proof of discrepancies in implementation. Corrective action will be designed for this process.
2 – Acceptable: Procedures are available and implementation is acceptable; however, opportunities for improvement exist. An opportunity for improvement can be designed for this process.
3 – Good: Procedure and implementation are acceptable; no opportunity for improvement identified.
4 – Best practice: Factory has designed and implemented the industry best practice.
Quality Assurance & Technical Assessment
Technical assessments will obtain an objective picture of your supplier’s organization and evaluate their capabilities in the following areas, among others:
Adequate quality management system and framework to achieve acceptable quality levels.
Relevant product knowledge and the ability to produce the products in compliance with international regulations and customer expectations.
Capability to mass-produce on time while maintaining the required levels of quality and safety.
When evaluating a supplier’s capacity, some of the most frequently considered points include:
Quality manual and procedures demonstrate revision control (sign-offs and dates), history of changes.
Product quality yield data, problems and corresponding improvement actions, the status of preventive/corrective/audit results.
Strategic and tactical objectives, goals, action plans, etc.
Analyses of field failures, inspection yields, resource needs, internal audit results, corrective action statuses, etc.
Corrective actions, trend charts, meeting minutes, non-conformance frequency and cost analysis.
Management review meetings and corrective actions.
Investigating training aids and instructions at workstations.
Qualification records, certification history.
Testing records, production quality records, audit records, interview workers to validate training records.
Job descriptions, job skills assessment, training records, training manuals.
Example of a quality audit checklist:
API factory quality audit checklist
What If My Quality Assurance Score Is Below Standard?
Thanks to its manufacturing and product knowledge and experience on the field, API is able to customize its QA solutions based on your specific needs and requirements. API will provide the supplier information on how they can go about improving various things within a factory. This information will be relayed back you, the retailer, where you will gain insight into your potential supplier and their factory operations to ensure compliance across the board.
Social / Health & Safety Assessment
The objective of a social audit is to provide an unbiased image of a supplier organization and practices according to local laws and international standard as well as your internal code of conduct.
Thanks to an adequate assessment of your pool of suppliers, your company can protect its brand image and improve its competitiveness. Managing your social risk should bring associated costs saving and should also foster long-term cooperation with a selected pool of suppliers.
To evaluate your supplier’s ability to meet the expected social, health & safety requirements, some of the more critical areas typically covered by a social audit include:
Checking whether factories operate in compliance with laws specifically related to wages and compensation, working hours, child labor, forced labor, harassment, and abuse.
Examining conditions in production and residential facilities and their consistency with applicable laws and regulations
Reviewing emergency preparedness and response plans as well as monitoring and performance measurements
Evaluating whether all possible precautions are in place to reduce labor and safety risks
The social audit assesses the social systems and structures that your supplier has in place and is normally based on the standards as laid out by the SA8000 and ETI Based Code. As a professional third-party auditing company, API is able to provide their industry expertise and longtime experience to aid you in achieving your social compliance certification. In addition to this analysis, our team will also define a corrective action plan and can also help you in the implementation and follow-up of this list of actions.
Example of social audit checklist:
API factory social audit checklist
Environmental Audit Assessment
It’s not new that supply chains are under increasing scrutiny to ensure environmentally friendly processes. In the context that we are currently living it’s important to verify that your suppliers are aligned with the relevant requirements and regulations to ensure a sustainable supply chain, and that they comply as well with your brand requirements and expectations. The best way to obtain a good level of visibility is by performing and environmental audits assessment to evaluate all relevant criteria and improve the environmental and chemical performance of your suppliers.
In order to evaluate your supplier’s ability to respect the environmental requirements some of the most critical areas usually covered during an environmental audit will cover the below:
Environmental policy statement document
Records of agency/government inspection, procedures for measuring and monitoring environmentally sensitive activities
Record of purchases, waste stream and consumption; inventory control procedures
Records/use of; non-hazardous (RoHS/WEEE compliant) materials in production, biodegradable materials, returnable containers or packaging, recycling program, packaging materials made of recycled materials
API sustainability team can help you assess the environmental and chemical performance of your suppliers with an accurate evaluation and adequate action plan to reduce the impact of your supplier’s processes and ensure that you are in the right path to achieve your sustainability goals and meet your customer’s demands.
Our on-the-ground expertise and our strong presence on the field allow us to have a deep knowledge of the factories processes, challenges and the applicable regulations. We understand your processes, factories and products, and are able to provide bespoke sustainability services that will result in higher levels of efficiency.
Example of environmental audit checklist:
API factory environmental audit checklist
KEY TAKEAWAYS
An adequate factory audit allows you to have a better visibility of your supply chain, starting with the relevant insights of your suppliers’ quality control processes and manufacturing capabilities, social and environmental practices to identify the best performing suppliers and those with the higher risk. This allows you to select your pool of suppliers accordingly and empowers you to strengthen those weaker processes where needed.
An adequate audit checklist will help ensure:
your factory’s quality systems are up to date, organized and well recorded.
confidence in the selection of your supplier based on checklist insights.
confidence in the quality of the product that is manufactured.
confidence that your supplier is actively meeting compliance standards, social and environmental practices.
This approach allows you to build a more collaborative relationship with your supplier, where you supplier has a more invested approach to your brand and its product. It helps to ensure top-class quality systems and a mutually beneficial relationship between supplier and retailer and a better budget allocation to focus where risks are high.
Interested in learning more about how API can help you with our audit solutions?
On September 14, 2021, the new SCIP Dissemination Portal by the European Chemicals Agency (ECHA) went live, giving the public access to information about substances of concern (SVHC) in articles as such or in complex objects (Products). The portal’s launch increases the transparency over chemicals of concern in products and will help track products containing substances of very high concern until they reach the waste stage. It also allows consumers to make more informed purchasing decisions and to choose safer products.
Since January 2021, companies that supply articles containing substances of very high concern (SVHC) on the Candidate List in a concentration above 0.1% weight by weight (w/w) in the EU market have been required to submit information on these articles to the ECHA. The notifications are stored in the SCIP (Substances of Concern in Products) database, and will be publicly available via the portal throughout the entire lifecycle of the products and materials – including the waste stage – contributing to a safer circular economy.
In a recent announcement, the ECHA said that around 6,000 companies across the European Union have already complied with this new obligation, with more than four million relevant article notifications registered in the SCIP database.
Based on the information gathered so far, the most notified product categories include:
Machinery and their parts
Measuring instruments and their parts
Electronic equipment and their parts
Vehicles and their parts
Articles made of rubber
Furniture.
Who needs to submit information?
Companies that supply articles containing substances of very high concern (SVHC) on the Candidate List in a concentration above 0.1% weight by weight (w/w) in the EU market are required to submit, including:
EU producers and assemblers
EU importers
EU distributors of articles and other actors who place articles on the market.
Retailers and other actors that supply articles directly to consumers are not obligated to submit this information to ECHA.
What information needs to be submitted?
Information relevant to the identification of the article;
Name, concentration range, and location of the SVHC; and
Other information on the safe use of the article, particularly if the above information is not sufficient to ensure the proper management of the article as waste.
Do you have any questions about how the new SCIP database requirements affect your business?
Many governments around the world are using legislation to drive responsible business practices and positive impacts on people’s working conditions. These laws require companies to manage their operational impacts on people and the environment and report on their efforts. It’s important to know which of these laws apply to your business and how to comply.
One of the most recent changes in this area is the new Human Rights Due Diligence Law adopted by the German parliament on June 11, 2021.
From 2023, this law will require large companies to conduct supply chain due diligence activities. Companies will need to identify, prevent, and address human rights and environmental abuses within their own and their direct suppliers’ operations, and take actions if they find violations.
The law aims to ensure that social and environmental standards are maintained in large companies’ operations and supply chains to address the following risks:
Forced labor
Child labor
Discrimination
Violations to freedom of association
Unethical employment
Unsafe working conditions
Environmental degradation.
Who does this new law affect?
From 2023: Companies based in Germany with more than 3,000 employees, or German-registered branches of foreign companies with more than 3,000 employees.
From 2024: Companies based in Germany with more than 1,000 employees, or German-registered branches of foreign companies with more than 1,000 employees.
What do the affected companies need to do?
Set up a process to identify, assess, prevent, and remedy human rights and environmental risks and impacts in:
1. Your supply chain 2. Your own operation.
Ensure you provide ways for employees of indirect suppliers to file a complaint alerting the company to any human rights or environmental violations.
Publish an annual report outlining the steps you have taken to identify and address these risks.
How can affected companies prepare for this change?
If this – or any similar law – applies to your business, it’s most important to have a clear internal process to understand and assess your supply chain:
Step 1: Define your scope
Map your suppliers and put in place a preliminary risk analysis to better understand your supply chain and current CSR capabilities.
Step 2: Pre-assess your suppliers’ CSR conditions
Conduct a deeper evaluation to identify your most reliable suppliers, the ones requiring action, and those with zero tolerance issues. You can then prioritize your program and create an action plan.
Step 3: Apply relevant actions based on identified risks and priorities
Deploy an adequate action plan based on the identified issues and their risk levels and implement remediation programs to improve the suppliers’ performance.
Many other countries have enhanced their regulations on human rights, such as:
Australia: Modern Slavery Act 2018
France: Corporate Duty of Vigilance Law
Germany: CSR Directive Implementation Act
India: Business Responsibility and Sustainability Reporting
Italy: Legislative Decree no. 254
United Kingdom: Modern Slavery Act 2015
United States: Transparency in Supply Chains Act 2012 (State of California).
How API can help you prepare for these legislative requirements:
Documentary review
Preliminary risk assessment to help you prioritize issues
Factory audit
Training
COC/manual/audit guidelines creation and review
Program benchmarking services for strategic suppliers.
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