How to get compliance tracking right in manufacturing

Chalkboard with boxes.
Are you still using outdated methods for compliance tracking?

The mere mention of the word “compliance” is enough to send many manufacturing companies scrambling. Just one bad inspection or audit could end up costing thousands of dollars in fines and fixes, potentially derailing your profitability and leaving a scar on your company image.

In a perfect world, a business could continue doing everything they’ve always done to remain in compliance, but seasoned leadership knows it’s not that simple. With ever-changing regulations and technology entering the workplace, companies must continually adapt to ensure they’re in compliance and promoting a safe work environment for all.

There’s no doubt that manufacturing companies must take compliance seriously. But how can you get compliance right the first time if you’re struggling to keep up with health and safety changes while juggling your normal day to day operations?

In today’s age of technology and automation, ERP systems are becoming a viable option for companies to keep a finger on the pulse of changing regulations. By tracking compliance automatically and gaining access to real-time data, companies can move forward with confidence and without the guesswork and labor-intensive manual processes.

What is compliance tracking?

Before we dive into specifics on ERP systems, it’s important to set the right expectations for compliance tracking and what it’s capable of.

By definition, compliance tracking is the process of organizing and monitoring compliance-related information and activities to ensure that no detail falls through the cracks. It oversees the completion of compliance requirements from the Environmental Protection Agency (EPA) and Occupational Safety and Health Administration (OSHA), as well as any progress that has been made toward achieving compliance. Ideally, it should also keep track of audits and inspections, both internal and external,

As regulations and requirements change, compliance tracking can keep you informed of these changes and help you better understand how to plan for tasks, resources, and timelines when moving forward.

The role of ERP software in compliance tracking

ERP is becoming a desirable solution for compliance tracking.

Historically, the compliance tracking process was largely done by hand via paper files and spreadsheets, often resulting in major time investments and inefficiencies. But without a way to track progress over time and collect and manage data, there’s always a risk of overlooking critical details that could impact the company’s health and safety.

ERP systems have evolved in recent years, bringing improved compliance tracking features with them. As automation and the Internet of Things become more sophisticated and accessible, they’re being integrated with other legacy systems like ERP that can help you improve the wheel rather than reinventing it all together.

Focus on industry-specific regulations

Regulatory requirements fall into two buckets: general regulations and industry-specific regulations. As a rule, you’re expected to master all general regulatory requirements, such as those pertaining to clean water and air. Other requirements, such as the presence of a Risk Management Plan, are only required in certain industries.

Naturally, the best place to start mastering compliance is in your own backyard. An ERP system can help you track compliance requirements that matter and develop individual plans for each requirement to ensure ongoing compliance.

Gain greater visibility and control

By design, compliance gives you a direct view into your company’s performance on specific regulations. Compliance requirements look at every aspect of a particular process to ensure it meets or exceeds industry standards, from the materials you use to how you execute your processes. By housing all of this data in an ERP system, you gain instant insight into your business operations and can better determine where you need to make adjustments.

Protect your company’s data

Cyber security issues are on the rise, costing more than $45 billion in damages in 2018 alone. Cybercriminals aren’t just targeting banks and credit card companies, either. Small municipalities, health insurance companies, data companies, hotel chains, and the government have all been targets of security breaches in recent years, and no company should feel like they’re immune to such an attack.

As security issues become more serious, compliance regulations regarding data protection will also continue to evolve.

ERP systems are repositories for mountains of sensitive data, including credit cards, banking information, and even personal health information. But they’re also regarded as the first line of defense against cybersecurity threats, offering a full suite of tools that can help defend your company against potential breaches.

Endpoint security features take inventory of the devices that are allowed to access the ERP system, while user rights ensure that only specific people have access to specific information. Because of this high level of data protection, companies can trust that the data within their ERP system is accurate, reliable, and uncompromised.

Create a digital paper trail

Get data-driven insights into your compliance activities.

Companies who have historically performed compliance tracking by hand may have had a literal paper trail of their activities, but there was no easy way to track this data over time and use it to develop deeper insights.

As a general rule, compliance tracking is all about being able to answer the questions of who, what, and when, with confidence. Who made changes? When were these changes made? Why were they made? Who approved these changes?

ERP software allows companies to digitize their compliance requirements and provide a single source of truth for everyone to work from, even if they’re in different locations. Every activity is properly documented and can be traced back to individual users to provide greater transparency where it counts.

Mitigating risk for manufacturers

When we think of the relationship between compliance and risk, costly penalties and losses often spring to mind. Organizations may face steep fines or expenses if they fail to act in alignment with regulations and laws.

But more importantly, the level of risk to health and safety increases when companies don’t comply with what industry regulations deem acceptable. Remember, regulating bodies have the research and numbers to justify changes in regulations. These changes aren’t made to make the lives of manufacturers more difficult, but rather to use newly available data to create a safer, more ethical work environment. Failing to comply with these changes could pose risks to your employees, property, and in some cases, the community at large.

In addition to monetary and safety-related consequences, failing to comply with regulations can also be viewed as an integrity loss. By its very nature, compliance requirements exist to ensure a company acts in accordance with what the industry has deemed fair, ethical, and safe. A breach in this regard is synonymous with a breach in the company’s own integrity.

Wooden blocks stacked up in a pile.
Risk can take many forms

Having a reliable, fail-safe way to track compliance helps manufacturing companies to mitigate each type of risk. Instead of performing manual calculations and data entry (both of which are prone to human error), users can leverage automation and data tools that do much of the heavy lifting for them and remove much of the guesswork from compliance-related activities.

What can compliance tracking do for your business?

Clearly, the greatest benefit of tracking and improving compliance is the peace of mind that comes with maintaining your high standards. Companies may find it easier to achieve greater business objectives when their processes are accurate, up to date, and not at risk of attracting negative publicity from regulatory agencies.But the benefits extend to other areas of your operations, particularly where your bottom line is concerned.

Reduce costs of compliance

Keeping up with compliance requirements is nothing short of mind-boggling. It takes a great deal of time to bring your team up to speed, implement changes, and ensure that other processes still work in spite of these changes.

Using an ERP system for compliance tracking can help you manage these changes at scale to reduce the associated costs and burden. Employees can rely on a single source of truth and know exactly what is expected of them, helping you tackle compliance with greater efficiency.

Maximize internal resources

When employees can spend less time figuring out compliance, they can free up their time to work on other business objectives. And given that time is money, ERP compliance tracking helps you save some of both.

Contribute to a stronger corporate culture

Two colleagues wearing white hard hards and looking at a tablet.
A culture of compliance leads by example.

Companies that focus on maintaining compliance often build health and safety into their company culture, and that doesn’t go overlooked by employees. In today’s modern workplace, a steady paycheck isn’t always enough to attract and retain top talent. Rather, workers also appreciate when a company invests in new technology that makes their jobs easier.

When companies appear to have their workers’ best interests in mind, employees hold the company in high esteem and may be more productive and engaged.

How Acumatica can improve compliance tracking in manufacturing

It’s not just a matter of implementing an ERP system to help you manage compliance, but rather choosing the best platform that will help you continue meeting short and long term objectives. Before you make the move to a more streamlined system, it’s important to understand what compliance looks like in your company and industry, define your goals for tracking compliance, and set realistic expectations for how it can transform your company.

As a leading Acumatica ERP vendor, NexTec has the skills and expertise to help you explore your ERP options that will make the biggest impact in your company. Schedule a consultation today and discover how the right ERP system can help you improve compliance tracking in manufacturing.

Learn more about Acumatica ERP here.

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