Regulatory compliance is a critical component of most chemical industry companies. Scrutiny can fall on companies from multiple domestic and international governance agencies sporting reams of regulations.
Maintaining full compliance is essential for companies, as seen in the recent post, 8 Operational and Accounting Challenges for the Chemical Industry. Why is maintaining compliance in the chemical industry such a challenge and how can an enterprise resource planning (ERP) solution help?
Domestic and international impacts
Regulations in the United States alone can fall under the federal Environmental Protection Agency, the Food and Drug Administration, the Occupational Health and Safety Administration, and the Department of Transportation. Among recently enacted regulations is the EPA’s Frank R. Lautenberg Chemical Safety for the 21st Century Act, which places new rules that prohibit the exporting of certain compounds and gives the agency authority on whether new chemicals can enter the marketplace.
Regulations do not simply guide companies operating domestically, either. The European Union has recently enacted REACH (Registration, Evaluation, Authorization, and Restriction of Chemicals) regulations that govern the use and production of chemicals.
The regulatory impact is broad in the chemical industry. Regulations govern not just the chemicals themselves, but also the materials, packaging, and production techniques used to make intermediates and final products.
With so many regulations at play, chemical companies must ensure compliance on many levels. The consequences of not doing so are serious. Regulatory agencies can levy heavy fines for noncompliance. Readiness means companies need to be prepared to meet voluntary or mandated deadlines for compliance.
Take, for example, the issue of labeling in the chemicals business. Labels are necessary for products in inventory, containers used to store those products, intermediates, and finished products. The amount of data that needs to be stored is staggering and includes quality, grade, quantity, measurement, location, batch, usage, outcome, final disposition, distribution, and customers.
Miscalculations at any stage and for any label can have disastrous consequences on the final users of those chemicals, customers and consumers, employees, and the environment. Integration is necessary throughout the supply chain to ensure that information about raw materials and their availability is well known.
Label printing is critical for the industry as it moves toward increased automation to reduce lead times, optimize production scheduling, and respond to ever-shifting market demands. Yet integrating the information required on labels and ensuring they comply with regulatory guidelines requires complex systems.
The role of the ERP
The complexities of regulation in the chemical industry — from safety to inventory to labeling — underscore the importance of having robust tools in place that help maintain compliance. An ERP solution integrates the many operational and back-office areas in chemical companies, from operations and inventory management to finance, sales, and marketing. Together, the systems and data used by these entities are in one uniform tool, providing seamless and integrated reporting and insights that help employees make better decisions faster.
ERP solutions for the chemical industry include tools that track requirements, measurements, quality control, and other mandated assessments and controls required by regulatory agencies. With the right tools, chemical companies can be compliant and drive innovation and efficiency.
NexTec Group helps companies develop the right strategy for the selection and implementation of an ERP solution. Our consultants work closely to understand needs and pressures and provide insights on the vendors, products, and features that will most benefit our customers. Download the NexTec Corporate Brochure to learn more about how NexTec Group can help your company maintain compliance and drive operational improvement.