21 March 2005 15:01 [Source: ICB]
In its 2004 report, Horizon 2015: Perspectives for the European chemical industry, Cefic recognised that revitalised Responsible Care programmes would help assure the future success of European industry. In later communications, product stewardship (PS) is highlighted as the major European project for Responsible Care – at least until 2010.
Members of the UK Chemical Industries Association define it as: ‘We will assess the risks associated with our products and seek to ensure these risks are properly managed throughout the supply chain through stewardship programmes involving our customers, suppliers and distributors.’
This definition recognises the importance of forming partnerships along the supply chain, so that information about the risks of chemicals and how these may best be managed can flow back and forth appropriately and efficiently.
Effective PS helps customers, distributors, traders, hauliers, shipping companies and others to obtain the right product safety information in the form they need, while allowing them to provide vital feedback about product use/misuse to manufacturers and others.
Critics argue that the increased emphasis on PS is a direct consequence of new chemicals legislation – Reach and Scale in Europe – which link products, the environment and supply chains. And the similarities between the new legislation and the chemical industry’s own PS principles are striking, for example:
- understand your product uses;
- assess the downstream risks of your products, and develop appropriate risk management strategies; and
- develop processes to share product risk information in a meaningful way with supply chain partners.
In addition to these legislative pressures, another type of PS driver is already having a negative impact on many of our businesses: the need to respond to the, sometimes unpredictable, demands of retailers for product safety information.
Retailers have long been hurt by the antagonistic activities of sectors of the news media and NGOs, who appear eager to condemn chemicals, or products containing chemicals, irrespective of the scientific and social evidence to support their use.
The perceived lack of support from an apparently defensive and aloof chemicals sector has led retailers to develop negative lists of ‘risky’ chemicals that align well with the objectives of NGOs, but bear little resemblance to the risk-based approaches espoused by industry.
Consequently, many economically and socially valuable chemicals have been lost to society, as retailers have struck off chemicals one by one, seemingly at random, from their supply chain inventories. Chemical companies may decry such tactics, but have sometimes been party to the problem by failing to engage adequately with their downstream supply chain partners on product safety issues.
If further reasons are needed for business managers to want their companies to fully embrace PS, these include:
- opportunities to reduce business insurance premiums, by being able to demonstrate that product-related risks throughout relevant supply chains are being adequately controlled;
- compliance with industry-standard PS practices, such as may be found in the codes of practice and management systems guidance of many chemical trade associations, which will help mitigate the worst consequences of liability claims should they arise;
- obligations to external stakeholders to manage fully and well the economic, social and environmental aspects of a business, for example, by developing sustainable development/corporate social responsibility programmes; and
- opportunities to enter new product markets, for example, when markets are taken over by lower-cost producers, because the product-related risks will be well-understood, managed and communicated to new downstream clients, perhaps several stages removed.
Product stewardship helps us to comply with risk-based product legislation, manage our businesses better, reduce our risks and engage meaningfully with our supply chain partners. This is where the true business value of PS lies, and companies that practice robust PS are invariably in a stronger position than those that do not, or pay only limited attention to it.
They will have the data to back up their understanding of the downstream risks of using their products, be continually communicating on product safety with their supply chain partners and have put in place programmes and processes that provide evidence for their basis of product assurance.
At an industry-sector level, too, there is evidence of a new urgency and enthusiasm to engage more fully with like-minded organisations on PS. For example, in the past 18 months, a team known as the Supply Chain Leadership Group (SCLG) has been established in the UK.
A unique initiative that has brought together leading retailers, chemical companies and their trade associations in the UK, the SCLG has now moved to the point of developing a programme of work with four main themes at its heart: supply chain mapping, information and risk management and communication.
Importantly for the chemical industry, the workplan recognises the importance of a scientific, risk-based approach to managing the products delivered to a retailer’s shelves, yet accepts that agreed voluntary measures will also be needed to protect the longer-term interests of retailers, the chemical industry and intervening supply chains.
The ambition of the SCLG is to see other organisations establish similar working groups, which would lead to far-reaching and positive impacts on global chemicals-related supply chains.
Product stewardship is often seen as an all-encompassing concept that is difficult to visualise within the context of a particular company or business. This is especially true for small and medium-sized enterprises, which do not normally have the resources to grapple effectively with implementation issues. Nowadays, most companies want to know, ‘what do I need to do?’ rather than ‘why do I need it?’. The following ten top tips will help an organisation to initiate or enhance its PS programmes and processes.
Strong policies provide overall direction to the organisation’s PS activities, therefore senior management needs to be fully involved in their development. A key policy statement, such as ‘we will only sell products for those uses where we understand the risks to human health and the environment,’ reminds management to check that the necessary risk-assessment resources are in place and alerts sales personnel to check product end-uses with their customers.
2. Management team
Periodically, senior managers and relevant specialists should come together to focus specifically on PS. There will always be many product-related issues that need to be addressed, and the team has a key role to play in setting priorities for action, funding resources and activities, and taking decisions such as ‘do we sell or not?’
3. Risk assessments
Good quality product–use risk assessments help to ensure that risk management measures are well-targeted, and supported by the wider organisation, especially marketing and sales. This is a particularly challenging area of PS.
Deficient product–use risk assessments can result in poorly targeted risk-management measures, sometimes leading to excessive precautions. These would detract from overall effectiveness, and create the impression that PS is a sales-prevention activity. This would be the worst possible outcome, since it would lead to hostility towards PS. Alternatively, risk management measures might be too weak, and business risk may actually increase.
4. Organisation skills
A range of organisational skills underpins any successful PS activity, but the full suite is normally found only in larger organisations. The trick is to tap into these resources in the most cost-effective way, perhaps by working closely with supply chain partners and/or buying in the relevant expertise when required.
Although everyone in the organisation must be trained in their PS responsibilities, special attention needs to be paid to ‘outward-facing’ personnel, including those in purchasing, sales, customer services, technical service and marketing, who are charged with the day-to-day delivery of PS.
6. Supply chain dialogue
Especially through its purchasing and sales channels, the organisation will seek to communicate proactively on PS matters with its supply chain partners, and offer direct assistance where practicable. The partner will be appreciative of these measures, and the business relationship is thereby strengthened.
7. Lines of communication
The selling interface is considered here. Normally there are excellent lines of communication into a customer’s purchasing and technical departments. But, how strong are the lines of communication to the manufacturing plants and HS&E departments, where product-related issues and incidents may first occur and later be managed?
Similarly, the lines of communication to the customer’s marketing team need to be strong enough to uncover new uses of the organisation’s product that may be under consideration. A marketing team will be less wary of disclosing this type of information if it recognises that it is in its own interests to work with a supplier who is strong on PS.
8. Business processes
Whenever practical, PS processes should be integrated into business processes and management systems. For example, many organisations have a well-defined R&D product development process, onto which it is relatively easy to overlay a product risk-assessment process. It is less likely that a sales organisation will have risk-based sales guidance available that clearly displays ‘approved’ products, applications and end-uses, maximum permitted dosages, risk-management measures, all of which are necessary for the proper management of product risks downstream in supply chains. In these cases, new processes and associated procedures will need to be developed.
9. Establish a prioritised plan
Given the huge scope of PS, it is critical that available resources are deployed as widely as possible in tackling issues that will lead to the greatest reduction in business risk. There is a large element of judgement involved here, and at the strategic level, is best addressed by the PS management team.
10. Maintain good records
Product stewardship documentation does not have to be extensive, but it does need to be developed. Consider risk assessments: these are important documents upon which the product risk management strategy of the business is based. Accepting that there is no such thing as a ‘safe’ product, it follows that the record-keeping process for these documents must be of a very high standard in case of a complaint, or claim, being made against the organisation. The same rigorous approach must be taken to other PS-related processes, including the provision of health and safety information, management of issues and incidents and so on.
Terry Yosie, American Chemistry Council (ACC) vice president for Responsible Care, noted during the 2004 US Responsible Care conference that: ‘The PS juggernaut is going to chase all of us.’ He further stated that: ‘ACC is in a race to move the PS "thought processes" through the membership so that processes are in place.’
Similar calls to action on PS have been voiced by industry leaders in Europe, and it is hoped this will encourage chemical companies and their associated supply chains to take up the PS baton more vigorously.Finally, the words of a former chairman of the British Chemical Distributors and Traders Association, Michael Cohn, remind us that PS is a positive and powerful tool for good in our businesses, industry and society at large. ‘We must respond positively to environmental issues,’ he says, ‘not by grudgingly implementing and complying with regulations, but by setting our own agenda from within the industry and clearly articulating the need to balance commercial performance with environmental safeguards.’n
Chris Eacott is managing director of Stewardship Solutions, which specialises in helping organisations globally to implement product stewardship programmes, including outreach activities to supply chain partners. Tel: +44 7834 676908; e-mail: email@example.com;
Product stewardship is going to play a big part in your business in the months and years ahead, whether you are a producer, trader or distributor, or downstream user of chemicals and chemical products. The need to manage the safety, health and environmental aspects of a chemical product throughout its life cycle will put a huge premium on efforts to communicate risk and hazard data along the supply chain, right the way down to the retailer and even the public.
European Chemical News this week launches a campaign to raise awareness of the importance of product stewardship and to promote initiatives in its implementation. Product stewardship is already receiving renewed emphasis both through Cefic’s Responsible Care programme and because of the European Commission’s proposals on Reach, its new chemicals policy for Europe.
So now is the time for everyone to take the concept on board and find out what exactly it means for them.
The ECN campaign will run from now until October. It will set out the issues clearly and in detail, and offer advice on best practice and what steps should be prioritised. Each month, a special product stewardship feature or features will analyse the topic in depth. In between these monthly features, we are scheduling regular news pages devoted to the topic, covering company activities, letters from readers and practitioners of product stewardship, and case studies of good initiatives.
Campaign coverage will be identified by the chain of people you see running across the bottom of these pages. They symbolise the need to pass information along the supply chain in a collaborative fashion. I am sure you will get used to their appearance across the pages of ECN this year!
We kick off the campaign this week with an overview of the issues by consultant Chris Eacott, of Stewardship Solutions. Next month, on 11 April, we bring you the retailers’ point of view, with an article from Mike Barry of Marks & Spencer.
If you feel moved to respond, please write or e-mail contributions to ECN’s editor John Baker, at ECN, The Quadrant, Sutton, Surrey SM2 5AS, UK; e-mail: firstname.lastname@example.org. I look forward to all your contributions.
Supply chain diagrams will be developed to provide more detail on how chemicals are used at various stages in the supply chain, help identify what controls and/or restrictions are currently being applied to chemical use, and facilitate assessments of how future trends in global supply chain management may impact on current approaches.
The supply chain maps will be used to illustrate how information is moved now and how it may be exchanged in the future. They will help in the development of (electronic) systems that can be used to ‘call off’ the appropriate type of information, depending on where in the supply chain it is required.
Once we know what a supply chain looks like and how information flows up and down it, a series of voluntary measures will be developed to ensure that the risks associated with the chemicals in consumer articles are being managed appropriately.
There will be at least three types of communication about the SCLG:
1. General communications to raise its profile, identifying it as the key source of knowledge about chemical supply chains, and encouraging others with information to share to approach us.
2. Engagement with key stakeholders (other retailers, chemical companies, NGOs, government, trade bodies) to ensure they understand and support what we are doing.
3. Dissemination of learning to key stakeholders.
1. HAZARD IDENTIFICATION
Toxicology – human health and environment
Implement appropriate toxicology studies
2. EXPOSURE INFORMATION
Occupational hygiene – human health
Environmental science – environment
Initiate/implement studies that estimate or measure the degree of product exposure to people and the environment
Application technology / technical service
Provide knowledge about product downstream applications, and typical handling and use practices
Implement studies that quantify the migration of product from substrates (e.g. a fungicide from a paint), thereby increasing the accuracy and reliability of the exposure data used in risk assessments.
Sales and customer service personnel
Check for new downstream uses, monitor routine product uses, and highlight product-use issues and incidents, all of which may necessitate a revision of relevant risk assessments
3. RISK ASSESSMENTS
Supply chain risk assessors
Prepare documented risk assessments based on relevant regulatory and other published human health and environment exposure models. A good knowledge of the practical use and ultimate fate of products at all relevant stages of the organisation’s supply chain is essential
4. RISK MANAGEMENT
Product stewardship, marketing, R&D, sales, manufacturing, logistics, procurement, legal, occupational health, regulatory and other functions
Development of risk reduction measures which drive reductions in business risks. Can include tailored supplier, customer and distributor training programmes and tools, engaging with supply chain partners further upstream or downstream, etc
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