Policing Chemicals in the Supply Chain

by | Feb 27, 2012

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An Outlook of What to Expect 2010-2013

More sustainable products depend on more sustainable materials coming from a supply chain.  The spirit – or level of enthusiasm – for sustainable materials and stewardship in industry can be gleaned from looking at sales trends and projections for technology companies who make software for managing supplier materials data. Typically this software is marketed for environmental regulatory compliance and an overall greener supply.  The fact that the market is growing tells us something.

Based on such industry-watching, the past two years in managing greener materials in a supply chain has shown steady growth– while projections for the two years right ahead suggest a tsunami.

–Chemicals in a material world:  2010 – 2011  In 2010 and 2011, businesses were catching on to the fact that policing chemicals in a product supply chain network is the next step in sustainability and stewardship.  As such, more strategically oriented companies implemented not just chemical management systems but systems with proven supplier communication automation capacity, standardized data formats and analytics.

–2012 to 2013 forecast  2012 should see continued expansion of chemical risk management initiatives and its technology-solution market, with serious acceleration in Q4.

2013 will be feverish in materials management.  This is largely because there is a major REACH regulation deadline in 2013.  Plus there are other market drivers strengthening and preparing to blow ashore that year, including GHS rulings, Green Chemistry, California Prop 65, and quakes in the California supply chain.

By the close of 2013, companies who have already implemented quality assurance / compliance programs will find that compliance with REACH, TSCA and GHS is a routine aspect of doing business.

–Trigger happy   Over 83,000 chemicals are registered for use in the US.  Managing those – with all their combinations and possibilities, as well as the associated risks to the environment, to workers and to a brand, is paramount.

Many companies are laggards when it comes to implementing quality systems to handle supplier data.  This is understandable given the lack of reliable and meaningful consequences for insufficient product quality or insufficient regulatory compliance.

But three triggers get businesses moving towards a supplier chemical management program:

  1. Media buzz about specific toxic chemicals, like the link discovered between TCE and Parkinson’s, where businesses rush to get a handle on similar chemicals in their own supply chain
  2. When it can be shown that chemical management saves money/trims fat
  3. Whenever EPA moves, even flinches or breathes, in the direction of TSCA
  4. A major RoHS or REACH regulation milestone in Europe

2012 will see gradually increasing activity in all these corners.  The steady supply chain materials management buildup trend will continue accordingly. Companies proactively managing their own material disclosure – rather than waiting for outside regulatory agencies to describe it – either have moved already or will move first and fastest.

Then, 2013 will mark a surge in companies’ ingredient crackdown as supply chain materials management oriented regulations worldwide reach significant crescendos.  And that will just be the beginning.  Because managing supply chain materials data is at the core of the next generation business model.

K.M. Hurley is an award-winning writer, environmental regulations adviser, and director at Actio Corp.

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