Chemical Supply Chain Management

Home > REACH > Chemical Supply Chain Management

Introduction

The REACH duty to communicate the presence of Substances of Very high Concern (SVHCs) down the supply chain is a challenge for any business. When the Candidate List of SVHCs was short, the task was manageable. It could be met by asking the right question of a supplier or asking a lab to test for a specific substance. However now that the list has grown, the challenge of meeting the obligation and ensuring that your company is compliant is much harder and there is no single solution to this problem. Companies need to adopt a proportionate and strategic approach; within that a supply chain management system is key.

The SVHC Challenge

Every company needs to identify their own and their supply chain’s vulnerabilities in relation to finding an SVHC. Unless you have a complete bill of substances for all the products that you buy, make and sell then there is no way of knowing where an SVHC may turn up. You therefore need a system to help you identify SVHCs in your goods, a strategy to decide what you want to do if you find one, and a way of keeping abreast of developments. Some of the key challenges of such a system are:

  • Gaining information from suppliers
    • More difficult with non-EU/EEA suppliers
  • Managing communication
  • Obtaining and verifying data received on SVHCs
  • Dealing with increase in SVHC scope

As with any strategy, you need to be proportionate and mindful of what your supply chain is doing and of what it expects you to do. How much time and resource you need to dedicate to this will depend on the complexity of the articles supplied or produced, the complexity of the supply chain, the flexibility of the supply chain to move away from an SVHC if one is identified and your product cycle.

 

 

There are six key parts to a robust supply chain management system: Communication, Training; Contracts; Supplier Auditing; SVHC Testing, and a Vulnerability Assessment.

1. Communication

If you buy articles in the EU/EEA, your duty isn’t to ask your EU/EEA suppliers about the presence of SVHCs, but in reality this is what most companies are having to do to gain piece of mind, and to move their compliance plan forward.

An initial step should be to send out regular letters to suppliers to raise awareness of the SVHC obligations, especially if they are outside of the EU/EEA. You may ask suppliers to fill in paper-based or online questionnaires on SVHC content of supplied products. If you do this find out if there is a system already being used in your sector (e.g. IMDS in the automotive industry) and, if so, see if you can integrate it into you own ERP system. Get suppliers to use dedicated IT systems for tracking the chemicals that a product, component or material is made from to help you build up a bill of substances for each product in your portfolio. Doing so is a lengthy task but a good way of demonstrating compliance. Under our Matchmaker service, REACHReady can put you in touch with companies who have a good track record in this area.

2. Training

Educate your in-house team. In our experience this is a critical step to any REACH compliance plan and in deciding what you should focus on in setting up your own supply chain management system. When we train in-house teams we like to see representatives from procurement, sales and the shop-floor at an initial session, as well as the HSE and compliance team. You should also educate your suppliers, both within and outside the EU.

3. Contracts of supply

Update your contract to include SVHC communication obligations in contractual agreements with suppliers. You may wish to add a clause stating “should not contain substances xyz on the Candidate List”, or perhaps even cast your SVHC net wider to an industry “black list”.

4. Supplier auditing

Verifying compliance should be part of any supply chain management strategy and you will be looking to see if they have a chemicals management system of their own for communicating information on SVHCs, if they test for presence of SVHCs and how they train their staff and suppliers. In some cases you may select to carry out random auditing of your supplier whilst for others you may need a more targeted approach focusing on “high risk” suppliers or products. If you already audit your suppliers as part of a supplier quality audit, add a REACH section to the audit.

5. SVHC testing

For companies with a large product range, testing every product, for every SVHC would be very costly, especially for complex articles. However testing does have an integral part to play in demonstrating SVHC compliance. Like auditing, you might consider it for:

Random testing as part of an internal or supplier audit

Strategic testing if there is a particular product risk or a vulnerability has been identified.

Testing as a last resort (45-day rule consumer request)

REACHReady can put you in touch with companies who have a good track record in SVHC testing. Contact us for more information.

6. Vulnerability assessment

The final piece of the jigsaw should be a vulnerability assessment which is recommended for companies with large product portfolios. Based on the information gathered in building your supply chain management system you should conduct a screening exercise. At the top of the list should come components sourced from non-EU suppliers (who have no REACH obligations), suppliers that have gone out of business, and parts produced from material likely to contain SVHCs.

When is my work done?

Most companies are unlikely to ever have 100% confidence that they and their products are REACH compliant and this is recognised by enforcement agencies. REACH due diligence and a working supply chain management system will stand you in good stead with the regulators as you will be ahead of the game and anticipating developments.

If you would like us to assess your approach to SVHC management please ask us about our Consultancy service.