Supply & Demand Chain Executive - August 2009 - (Page 21)
RESEARCH REPORT: Supply Chain Readiness for REACH and Global Material Regulations Failing the Grade? Supply chains are at risk today from significant disruptions stemming from many known sources. But the European Union’s REACH regulation (Registration, Evaluation, Authorization and restriction of Chemical substances) represents a “hidden risk” that many corporate executives appear to underestimate. This “Report Card” highlights the extent to which industry currently is ready for REACH and provides a benchmark against which companies can rate their own level of preparedness for the regulation. The REACH legislation took effect on June 1, 2007. The regulation provides for phased requirements over an 11-year period, including obligations to register, with the European Chemicals Agency (ECHA) in Helsinki, substances imported into, or used within, the European Union. Nearly 150,000 substances were pre-registered with ECHA by 65,000 companies by a December 1, 2008, deadline. In addition, an expanding list of “Substances of Very High Concern” (SVHCs) will be subject to potential substitution in products. Companies also must be prepared to proactively notify downstream users regarding the presence of SVHCs in their product and respond to consumer requests for information on SVHC presence within 45 days. The impact of REACH will extend beyond companies engaged directly in business within the EU. It will apply to companies with relatively low levels of EU revenue – and even companies that do no business in the EU but that engage with suppliers or customers that are involved in the European market. A customer that sells into the EU may require information on SVHC content to satisfy its own regulatory obligations, while suppliers that service customers in the EU may opt to discontinue production of parts or component that include SVHCs rather than continuing to provide both “compliant” and “non-compliant” product lines. The recent executive briefing, “Report Card: Failing the Grade on Risk in the Supply Chain,” prepared by Supply & Demand Chain Executive, in conjunction with IHS, suggests that many organizations are behind in their preparations for REACH. The briefing presents an overview of the results of a research study conducted in 2009 by Supply & Demand Chain Executive to quantify the risk of supply chain disruptions associated with REACH and understand current levels of preparation among the 200-plus global organizations that participated in the study. The Report Card at right represents the high-level conclusions of the study. The remainder of this report provides greater detail on the Supply Chain Readiness Areas highlighted in the Report Card, breaking each REPORT CARD Supply Chain Readiness Area Overall Heath Effort & Action Organizational Readiness Level of Visibility, Stakeholder Engagement, Executive Engagement, Executive Sponsorship, Reach Program Formalization CBD C- C+ C CC- Supply Chain Readiness Supply Chain Awareness, Level of Concern, Acknowledgement as Supply Chain Issue, Priority Level, Preparation & Control Information & Systems Readiness to Notify, Conﬁdence in Ability to Respond to SVHCs, Methods of Gathering SVHC Information & Outsourcing, Data Management Execution Readiness Program Establishment, Activity Prioritization, Budget Allocation EXPLANATION OF MARKING SYSTEM OVERALL HEALTH is an indication of the current readiness of people, process, and technology. A—Very High Level B—High Level C—Sound Level D—Limited F—Very Limited EFFORT & ACTION is a measure of the steps being taken to close gaps and enable an appropriate strategy. A—Excellent B—Very good C—Satisfactory D—Needs attention F—Unacceptable Solutions-based Intelligence for Supply Chain ROI WHITEPAPER
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