Integrated data structures as a basis

Compliance requirements for PLM concepts

Compliance issues are relevant for all industries and affect all stages of the value chain as well as all aspects of product manufacturing, development, maintenance, and disposal. It is not only the person who places a product on the market who is challenged but also every supplier. How can compliance - i.e. adherence to legal and regulatory requirements - be ensured throughout the entire product life cycle?

Compliance requirements for PLM concepts and PLM practice should be examined with regard to two areas "material-substance compliance" and "export compliance" and adapted if necessary. Although these two areas differ significantly, the principles for managing data and the procedures for providing evidence of compliance are similar.

Material-substance compliance

Material-substance compliance refers to compliance with regulations and standards for materials used in products with respect to listed limits (REACH, RoHS, etc.). In addition, there are also efforts to prove the origin of minerals and metals via so-called smelter lists. Primarily affected by these regulations are all physical articles or their product data. Stakeholders for material compliance verification are primarily regulatory authorities and customers.

Export compliance

Export control has recently become more relevant and explosive due to the Ukraine conflict. One of the central issues here is the dual-use question, i.e. whether certain substances or products could also be used for military purposes beyond the civilian sector (e.g. laser, radar or encryption technology, high-performance computers, etc.). Embargoes and sanctions must also be taken into account. Mechatronic products, for example, are primarily affected by export compliance. Stakeholders here include customs authorities, customers and SECO.

Typical challenges for the reliable provision and updating of compliance evidence

Companies often face the following challenges for both material-substance compliance and export compliance:

• Unclear responsibilities and insufficiently established process, or lack of binding deliverables in development and product maintenance.
• Unclear data and hardly comprehensible specifications regarding materials, proof of use of materials, etc.
• Lack of up-to-dateness and no central access to proofs, certificates, and declarations
  Collective declarations for various products
• Difficult communication with suppliers, imprecise statements by suppliers regarding specifications
• Purely document-based approach with forms creates redundancies and makes evaluations across structures and multiple uses in different products and devices difficult

Central requirements for the four phases of the compliance management process chain

• Product specification: Here, compliance must already be met with metadata rather than on a pure document basis.
• Declaration data from the supply chain: Data must be requested at the article/assembly level and supplier shares (relationship between articles and suppliers) should not be communicated via e-mail but via a web-based supplier portal.
• Compliance check on entire product structures (BOMs): Here it is necessary to carry out a compliance assessment based on declaration data and specification data.
• Compliance reporting: Compliance reporting is carried out on the basis of the compliance check and the compliance evidence should be uploaded to a customer portal.

Positive cost-benefit calculation

In summary, compliance in the area of "material substance" as well as in the area of "export" places specific demands on product data and structuring, on company processes as well as on IT tools. Integrated data structures are a decisive success factor for efficient compliance evidence. Internal and external organizational aspects are also important: It is important to clearly define corresponding roles and tasks for a reliable compliance management process chain and always to "get the suppliers on board" in the long term and to take them into responsibility.

Even if the establishment and maintenance of integrated compliance management are associated with costs, the cost-benefit analysis shows that the investments are worthwhile. This is especially true because the corresponding compliance efforts are often already being made within the company - albeit in a hidden and less efficient form.

PLM Open Hour: Compliance topics in the PLM context

In this Open Hour, we classified the following two compliance topics in the context of PLM for you and provided you with background information on key issues Direct link to Slideshare and download (in German)

Or click through the presentation here (in German):