Product Compliance Limiters and Their Impact on Product Shipments

The Problem

It’s time for ship authorization and production shipments to begin. But, to everyone’s surprise the system does not have the GREEN light to proceed. For some unexplained reason there is a gap in the evidence needed that proves the product meets all of its regulatory obligations. But no one caught it, no one knows the reason, and finally no one appears to be responsible for the situation the business is in. The product is STOPPED at the shipping door pending resolution which is costing the company time, resources and money.

Or, take this example. Is your product design centered on a few hundred units or can it support shipments in the 1000s? Is there an internal compliance process that is flexible yet simple that can support low and high volume products? Many companies do not totally embrace the limiters in their life cycle process or simply do not consider them at all. This poses real threats to the company’s future as well as its business model.

What are these limiters? Here are just a few: product environmental, labeling and instructions to be included in the product documentation, knowing the actual regulatory requirements, external laboratory testing and evaluation, effective communication with the manufacturing side of the business and their assembly and production line testing of the product, the need for an importer to register and or submit the product to the regulator, the frequency range and power limitation settings for radio products in some countries, the cycle times involved to actually get a product approved by a regulator (i.e., FCC (U.S.), Anatel (Brazil), CCC (China), BIS (India), IFETEL (Mexico), ICASA (South Africa), etc.).

Unfortunately many businesses find themselves in the exact predicaments presented above, or something rather close depending on the maturity of the business, the talent behind the product compliance activity, and the support structure within the business. On the surface it appears daunting to resolve, yet there are a number of key steps that can be taken to prevent future occurrences. With a small change in focus the solution can become visible on the horizon. The topics discussed next are in this author’s opinion some of the more critical first steps, but certainly each company most likely have many more to address.

It Starts at the Top: The Requirements

Probably the most import factor is to inventory or categorize exactly what the product needs to meet. Sounds easy, but it can be problematic if not approached in a manner that is both repeatable and traceable over time. Just why would a business need such an activity? For two reasons: 1) to meet the legal obligations for the product itself; and 2) to ensure the consumer/user gets a quality product that was designed and built from a known set of criteria.

“Regulatory” includes all items that are based on a law or directive in a given country. Typical examples of this are the FCC in the U.S., the CE process in the European Union, etc. Within the scope of regulatory there could be various criteria for electrical, mechanical, software, radio frequency, encryption, product environmental, energy efficiency, marking and labeling, plugs and several others depending on the country where the product is intended to be marketed.

One error many companies make is not keeping current on what the country requirements are. For example, a particular country may have one set of regulatory requirements on April 1st 2014, yet on April 1st 2015 that regulation has been updated or changed. Surprises like that can create havoc on the production line and force engineering into panic mode to assess the product’s performance against the new/revised requirement, make any necessary changes to the product, and finally adjust the inventory to separate compliant products from non-compliant versions.

Avoiding such problems is quite simple, but it does take focus in order to remain diligent. Compile all the known regulations into a single location and organize by country and product. Where possible, setup a database or spreadsheet to categorize the information for simple interrogation and use by engineering and other pertinent parties. On a routine basis survey each country to determine if any changes are in process or are likely to occur in the near future. Feed this information into the database and date code accordingly to reflect the new requirement.

Once complete, send out a notice to all interested parties regarding the change of requirements. This will provide a heads-up to engineering and will hopefully allow the time needed to update the products if needed. It is highly recommended that representatives from other different functions in a company, such as manufacturing, technical operations, specifications department, factory representatives, incoming inspection, quality, distribution, marketing and sales be notified of these changes. Their roles in the overall scheme to transition products to the latest requirements must be mapped out clearly and distinctly well ahead of time, and their specific duties and obligations regarding the new requirements and how to handle them needs to be documented in a process that they can follow on a daily basis.

There is a word of caution, however, that anyone who is responsible for requirements gathering needs to be aware of. It is critical to have a competent person
or organization that is plugged into the aggregate scheme of requirements gathering and organization
of the material.

The word ‘REAL’ is the best word to describe the challenges a client faces and how the staff doing the job can mislead an entire organization into thinking all the requirements are justified, i.e. REAL. Many clients trick themselves into having their product meet requirements only to find that some were actually market-driven as opposed to legally required, not based on any regulatory scheme in a country(s) or not based on any factual evidence at all. This is not to say that market requirements are not required, rather, it points out where focus is needed to separate out legal from market-driven. It also implies that the organization’s management team may have different views which need to be understood. For example, some companies may not want to have any market-driven requirement be a “product compliance limiter,” while others have an entirely opposite viewpoint.

Getting the Job Done: The Right Person and Team

With the requirements set in place, having the right leader(s) and the organization to support them is critical. Too many companies assign the task of “product compliance” as a part time job, assign it to staff whose expertise does not reside anywhere in the spectrum of compliance, or totally ignore it until a problem arises. Saying that, some have the talent depth to use a team of individuals to get the job done and rely of their specific assets to build a robust platform of product compliance. Whatever the level of talent, consider these facts as integral to a successful product compliance team:

Establish an owner whose function can be viewed as this: if there was a knock on the door and a country regulator presented information about a product failing, who would the company turn to that has the entire picture of product compliance? This person is the leader and driver for the product compliance function in the company. He or she will be responsible for setting up the product compliance system and ensure that the right organizations inside the company are engaged as they should be.

Look across the company and the processes used to design, build, test and ship the product, and identify the leader or responsible person who is capable of supporting the product compliance team. Ensure those individuals are engaged with their peers in other parts of the company.

Embed a reporting structure and accountability system that has top management support and awareness. If this is not done, there will be most likely some individuals in the company who will view product compliance as a second or third priority to the other tasks that need to be done.

The strength and depth of the product compliance function is the backbone and quarterback of the system, i.e. the person/team who is there to make
sure the products get shipped on time as well as meet all requirements. As noted in the opening portion of this article, a company is at a severe disadvantage if no one is at the wheel overlooking what is happening to the product or is only able to react to a problem after the fact.

Change Control: Keeping the Bill of Material Safe and Sound

One of the more common threads behind product performance issues and customer complaints can be found in how a company manages the bill of materials (BOM) used in the product. Industry on average mishandles the BOM a substantial amount of the time. The reasons range from severe to relatively minor, but the impact of such a defect can be very problematic for the company and/or their customers.

Take for example a common resistor which, for arguments sake, is a 10,000 ohm chip onboard component soldered to a printed wiring board. Depending on where that item is used in the
design, many types of product performance issues can arise, again from relatively minor or drastic. If the resistor is used in an audio amplifier circuit, the audio from the circuit may deviate slightly and the user may not even recognize the issue at all. However, if the resistor is also used in the transmit audio circuit (which is a controlled parameter in many country regulations), the product could fail the transmit
audio response curve and therefore the product is technically out of compliance. Depending on the country where the product is sold, there may be regulatory sampling being performed where the country regulator pulls products from the shelf and tests it for compliance. Hence a problematic situation could arise for the manufacturer.

Keeping track of the BOM appears complex but is actually quite easy to implement when broken down into its key aspects. By following the guidelines listed below any manufacturer can implement a solution for controlling and managing changes to the BOM:

All parts in the manufacturer’s product must have a part number assigned. This would include software and firmware if applicable.

If a part is used multiple times always have a designator for each time it is used (i.e., R104, R105, etc.).

Examine all the circuits of the product and map the performance of each circuit to key its components that are used in the design. These are commonly called a critical parts list (CPL). When the mapping is done, it is prudent to understand how a particular component on the CPL can impact performance of that circuit. Look for regulatory or other business requirements, such as safety, EMC, radio frequency, product environmental, energy efficiency, and determine which parts need to be on the CPL and link their impact with a specific performance characteristic.

Once the CPL is identified, embed in the BOM a special designator in order to be able to quickly identify the CPL components in the BOM. If this is not practical to do, a simple list that is maintained by the compliance manager could be used. If this is the approach you choose, it should be included in all change notices that are routed for signature.

Design a simple change notice document that is intended to manage the addition or subtraction of a part to and from the BOM. Generally, at the high level, this would include the part number of the component, its description, circuit designator, value, evidence of compliance or other testing that has been completed, crossover date for implementation, information on what to do with old products that may be in inventory, where it is used, other information that would advise groups such as engineering or manufacturing about the change and any related controls or processes that may be impacted (i.e., testing) and, finally, a signoff list of all persons or groups that need to be made aware of the change even though their specific role may not be impacted. It is important to identify all of the teams that need to see a change notice and to include them in the signoff process. It is neither acceptable nor desirable to leave a group or team out of the signoff process.

For any change to the BOM, the change notice document is needed-no excuses. Each change notice must be routed for approval to all parties on the signoff list, even though it may be out of scope for their particular group. As the change is routed for signature, each party can assess if the change impacts them or not and, if not, the correct steps can be taken to ensure the change is adequately covered (i.e., maybe a change in testing is required, etc.).

Any change notice needs to have an owner. That owner is responsible for routing the change, ensuring it gets completely through all signatures, and finally collecting the signed change notice. Once entire loop is complete, the BOM can be changed.

Product Testing: Managing and Deploying

Virtually all products in the electrical and mechanical world require some form of testing. Testing can be required for quality, product environmental, regulatory, engineering, manufacturing or other purposes. One of the more important testing aspects involves the use of external resources, such as an ISO 17025-accredited testing laboratory. Accredited testing labs are the life line of the product life cycle and can provide invaluable information to the manufacturer of the product regarding a products’ performance to specifications. Unfortunately this is not always recognized as a critical activity in all the ways it should be.

Many manufactures view testing labs as partial or as-needed activities. However, few manufacturers plan ahead in a way that testing organizations can understand and deal with. It tends to be “do this now and we will be back in a week” type of interaction. A healthier approach is to agree internally on the entire testing strategy, the timeline expectations, and the deliverables expected from the testing lab. Then, follow up that process by engaging the testing lab based on that information. This approach can save significant time and money in the overall testing process, and helps to set everyone’s expectations well ahead of any actual testing.

Another key aspect is how to approach the testing lab about product changes. When a product is changed and needs to be tested to validate performance, different testing organizations can take different approaches. For example, some testing labs will repeat the entire list of all tests even though the product change only impacted certain performance characteristics. Prior to going to a testing lab, the product change should be evaluated internally to determine the areas that may potentially be impacted by the change. These “at risk” areas should definitely be tested by the labs, and it may not be necessary to repeat any other non-related testing that is not at risk.

Using a test lab usually generates a huge amount
of data. One of the common problems is that
testing data goes into the deep, dark file cabinet,
never to be seen again. A better approach is to keep this data organized, link it to product changes and time lines, and have it readily accessible for engineering or other teams to study. There is a
scheme in the industry called “delta testing.” This means that, if the manufacturer has a set of data, it establishes a reference point that can help determine whether additional delta tests are actually needed or whether the entire suite of tests need to be conducted all over again. Testing data is often lost or is untraceable to a product or activity, resulting in the need to retest everything, often at an additional and unnecessary expense.

Testing labs also have different skill sets and equipment. These are used to determine the capability of the lab to perform tests and is part of their scope of capabilities. A given testing lab’s scope can be complicated as well as costly to implement, requiring some labs to contract out certain tests, typically adding to the time and cost required for testing. Any manufacturer should ensure the lab that is used has the scope and accreditation to perform the testing that is needed, and to understand upfront which if any testing needs to be outsourced to another testing lab. Outsourcing can create some added risks, but can be managed if the primary testing lab has a quality system in place to ensure that outsourced tests are done correctly.

Schedule: Will the Real One Please Stand Up?

So many times in the life of the product, the scheduling or timing of events or activities, rears its ugly head. “When are we shipping- oh- it is that early?” or “does anyone know when we can expect material to arrive?” These are just a few of the examples that most of us have probably heard.

The moral of the story here is to have one, that is, a schedule that everyone is aware of and is measured by.

In looking at a schedule, one area most frequently underestimated is the time required to get a product approved in a country. Did you know that some countries can take over 10 weeks to get approval, while others can approve your product in just a few days? And, if the product is a medical device, the timeframe for regulatory approval can run as long as two years, depending on the country.

The key to a robust schedule is simple—have an owner. In order to drive an organization or project, the team needs a target, one that is traceable to everyone’s activities and also to the product itself and its readiness to ship to the customer. But customer shipments can be stopped dead in the water if the country where the product is going to be marketed has not approved the product. And this situation can really complicated really quickly if more than one country is targeted.

The schedule owner needs to plan the timeframes for all the regulatory approvals. Each product and its variations should have a link to the regulatory timeframes. Again, simple project management tools and spreadsheets can help keep track of the timeframes. The schedule should be communicated to all interested parties and subject to strict version control requirement.

Summary: Jump Right In – The Water is Fine!

Patience is a virtue. But, in the world of product compliance, it also pays to be diligent. Although this article addressed five specific limiters, each business should carefully determine others based on their business model. If there is any doubt, bring in third party to do a cross-check with the internal efforts. A good gap assessment is healthy almost every time.

author merguerian-peterPeter S. Merguerian is President and CEO of Go Global Compliance Inc., US based but with clients worldwide, provides global regulatory consulting and certifications (International Approvals) using well proven engineering principles and practices. Mr. Merguerian has over 30 years global regulatory compliance experience with an emphasis on product safety, EMC, wireless, telecoms, international approvals and enhancement of product compliance processes. Other positions held include corporate-wide responsibility for global services relating to Market Access and Conformity Surveillance, Engineering, Accreditation and Certifications. Mr. Merguerian holds a Bachelor of Science Degree in Electrical Engineering from the Illinois Institute of Technology, Chicago. He speaks five languages and owns and moderates two popular global regulatory groups: Linked In  (Global Regulatory Compliance) and a blog at www.globalcompliance.blogspot.com. Mr. Merguerian can be reached at peter@ goglobalcompliance.com.

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5 Responses

  1. Kaveh

    A comprehensive article about the many complexities of compliance testing and certification requirements. Peter demonstrates his expertise in the field through many relatable, industry-relevant examples he proposes. Any manufacturer would be well advised to review this article when making decisions regarding their own compliance needs.

    Reply
  2. Jon Griver

    A thorough description of the issues involved in keeping products in compliance. In my specialty, medical device regulation, it’s both harder and easier to handle these issues. It’s harder, because there are more technical requirements to deal with than in other industries. Subjects such as risk management, software validation, biocompatibility, clinical efficacy, etc. are mandatory. It’s easier, because, in most cases, the products must be approved by regulatory authorities (FDA, etc), and the ongoing maintenance of regulatory compliance is monitored by audits. So there is less temptation to take shortcuts; you’re likely to get caught.

    Reply
  3. Mike Grothus

    Compliance is an ever evolving story, and thanks to Peter and other members for providing guidance as we all navigate this challenging arena.

    Reply
  4. Franck Deschamps - International Product Compliance

    As usual Peter, very interesting article on how to define a good Product Compliance Strategy !!

    Reply

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