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Establishing Compliance Services Supporting business Comply with EU Product Safety Requirements Course number: EUI35. Mark Hellyer A4U STE on DCFTA Policy Implementation March 2019. Overview of Workshop. 3. 2. 1. EU system of Product Safety Compliance. Overview of Training.
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Establishing Compliance Services Supporting business Comply with EU Product Safety Requirements Course number: EUI35 Mark Hellyer A4U STE on DCFTA Policy Implementation March 2019
Overview of Workshop 3 2 1 EU system of Product Safety Compliance Overview of Training Establishing a Service Delivery Plan What Compliance Services Look Like Next Steps Objectives of the Training and services Training methods to be used Finalisation of the aggregate delivery plan Start working Ensuring level playing field Overview of the EU system and what business must do Scope of services and how to deliver each Development of a Service Delivery Plan for each service to identify resources 4 5
1 Overview of Training • Objectives and what they can do after/get out of training • Services focus for this training • Training methods
Vision and Objectives the Training “To provide EPO with guidelines on how to establish business compliance services After this training, start delivering” • Provide understanding of the different services (content and scope) • Tools to deliver the services (TORs, Report template and instruction guides for each service) CONSISTENT, QUALITY and COST EFFECTIVE • Work out KPIs for these services • BUT not: methodology for finding the information – that is the training course
How to Sell Services Needed by Business • What are they buying: • Saving money • Saving time • Providing services in a form they need and can use (sell results) • Offer business something of value to them • Note: NOT CAB work but guiding business through conformity process • no need to be expert (skills: read English and ask questions of clients and experts) • Compliance Services in EU (consultants, CABS, Trade Associations, gov. consultancy) • General Seminars (Charge and/or lost leader) • Business training (Charge and/or lost leader)
Fee rate Conundrum What the market can sustain (or willing to pay for) Versus Profitability (someone always has to pay) or cost • 3-10 X daily actual salary (salary to earnings ratio) • Top Consultant Forum (UK) x 5 • Author of The Consulting Apprenticeship (USA) x 3.0 – 6.0 [average 4.5] • Management Consulting: A Guide to the Profession (ILO) x 2.5 – 4.0 [average 3.25] • Management Consulting: A Guide to the Profession (ILO) x 10 [for major reputation based] • Profits for Partners, Management Consulting (USA) x 3.0 (3 to 1 rule) • Average 5.2 with Reputation • Average 3.9 (non – major consultancy, excludes Accenture, Bain & Co., Mckinsey, Boston Consulting, Booz Allen, Mercer BIG 4 )
Services focus of this training • Compliance Helpdesk Operations • Product Compliance Review • Sector Seminars • Training to business • Individual Compliance Plan • Group Compliance • In company Mentoring ….. If asked on-going support
Methods Seminar Training Workshop
2 EU system of Product Safety Compliance • The QI System • Proving compliance • EU Experience • Key learning on compliance
Coverage – WTO Definition • Technical Regulations (WTO TBT Agreement): • Human safety • Protection of environment • Protection from deceptive practices (information) • SPS Measures (WTO SPS Agreement): • Health of humans, animals and plants
Implications for Manufacturers Unless mandated CAB, Self Declare Even if outside CAB provides certificate, manufacturer still responsible Dynamic nature – if change anything (eg supplier) update file for that product EU (mostly) provides “essential requirements” and leaves to manufacturer to prove (use of Harmonised Standards) Does not matter whether your product complies or not, ONLY DOCUMENTATION PROVES IT One step principle – in supply chain, you are only responsible for checking suppliers compliance, not suppliers supplier EU traceability - accredited laboratories (EA) and metrology (EUROMET) Broad Overview of EU Approach Differences Shift from pre market to post market controls Shift of responsibility from Government to Manufacturer RESIDUAL LIABILITY – 10 years after last placing on the market Company Solutions - Identify Hazards, Risk based and proportionality
Methods of Compliance Company Declaration of Compliance (DOC) Harmonised Standards Low Risk Products (Internal Control) Medium Risk (Harmonised standards or Type Approval) High Risk (Mandatory CA) • Technical File Preparation • Product Design (material input) • Production quality (GMP – TQM) • Product quality • Product verification • Input DOC • Testing (in-house; CAB/LAB) • GMP (certified or not) Product or Full Conformity Assessment by Notified Body (Certification) • Input DOC • Testing (in-house; CAB/LAB) • GMP (certified or not) Type Approval by Notified Body
EU Experience – Compliance Reality BUT, - Business time and effort * SME Compliance procedures for Machinery Directive
Step 1. Product-specific requirements for EU market access 8509400000
Step 3. Identify Standards “EN 407 Protective gloves against thermal risks: can be used to convey compliance of personal protective equipment (eg gloves) against the essential requirement 3.6 Protection against heat and/or fire PPE designed to protect all or part of the body against the effects of heat and/or fire must possess thermal insulation capacity and mechanical strength appropriate to foreseeable conditions of use.” “EN 71-7:2014+A2:2018 - Part 7: Finger paints - Requirements and test methods: can be used to convey compliance of paint for children, Toys, to all essential requirements of finger paint” “EN 13850:2006 Safety of machinery – emergency stop – principles for design: can be used to convey compliance of all machinery to essential requirement 1.2.4 Stopping: 1.2.4.3 Emergency stop Machinery must be fitted with one or more emergency stop devices to enable actual or impending danger to be averted.”
Step 4. Conformity Assessment Plan Actions to ensure conformity can include using: • Harmonised standards • Other standards • Testing; • Instructions, warnings and labels; • Sampling; • Quality assurance; • Redesign
Step 5. Prepare Technical Documentation and Declaration of Conformity • Technical regulations require the manufacturer to prepare a technical File; • File must: • be made available to market surveillance authorities; • be retained for each product for 10 years after the product is last placed on the market. • Declaration of Conformity; • In addition, the technical regulation may require the manufacturer to affix markings (such as the CE mark for exports); • Strict design and use requirements for such markings where are also subject to national market surveillance use.
Food and Agricultural Products Same Services Different Methodology WHY? Different control methods (MANDATORY LEGAL) Animal origin Non-animal origin Dominance of few players (PRIVATE STANDARDS) Grocery 40% of €1.1 trillion 10 retailers Food Service 25% Of €330 bn 100 companies Manufacturers 25% of €1.1 bn
Different Steps to Compliance Support 01 02 Identify Legal Requirements . 03 Product Testing 04 Certification . Identify Market Standards 05 Pre-Audit Preparation
KEY MESSAGES • ITS NOT COMPLICATED –once you know the requirements and the standards, it relates to your products and processes so whether or not you currently comply, technically you (business) will understand what is needed for 80%. Other 20% you find from guides and research and ORGANISATION • YOU NEED COMMITMENT –this is systemic change of attitude throughout the production so it’s a mindset change for all staff from producing to producing to a set quality objective so need to bring along the whole factory. • HARD WORK –it takes time and effort but worth it – better quality product guaranteeing performance to customers and increasing efficiencies and access to international markets (also will become national requirements under AA). • IMPACT IN EU of SEM +15-30% Productivity
3 Compliance Services • What do they look like in Reality: • Objectives of service – what business gets and how can use • TORs • Deliverables
Outlining Services DELIVERY TOOLS: • TORS & T&Cs (cost of contracting) • Standard template for deliverables • Method (quality and cost control Service Delivery Perspective • It all takes time!! Only • Control costs and quality assurance • FOR SINGLE PRODUCT OR PRODUCT SERIES Client Perspective • Buying is client confidence – TORs and track record (loss leaders) • BALANCE – give all so they can do it themselves (on-selling versus equipping them to do themselves
Time and Money Saving for Client in EU (Ukr x2?) BEFORE Proving Compliance – find and understand requirements and methodology to prove compliance – EU companies 3 days pa (dynamic) Ukraine est. 80 est. 28 est. 14
Path to Compliance Service Delivery Communications A General Awareness B Direct to SMEs C Coordination with wider stakeholders 2. Product Compliance Review 3. Business Training OR 4 Sector Seminars Conformity Assessment And Compliance 5 Individual Compliance plan 5 Individual Compliance plan 1. Short Consultancy 6 Group Compliance
Compliance AWARENESS Versus SERVICE DELIVERY BUT BRINGS SMEs TO SERVICES 25% compliance Seminars Information on DCFTA requirements to export to the EU 0% compliance Communications Provision of clear messages and information on compliance (brochures, websites, etc) 1% compliance Short Consultancy Provision of very short information but very specific to SME’s own product, but few companies able to convert 25+% compliance In company support Direct Support to SMEs resulting in compliance (individual review or plan, or group basis) 33% compliance Training of Business Whilst this provides information, it focuses on methodology that a business could follow Definition depends upon the outcomes – but blurred Information clearly leads to demand for “Know how” Know-how provides sufficient information that allows SMEs to undertake compliance themself Direct Services to SMEs leads to Compliance
Business Training (6 day service) • Trainers Manual (for those that followed the course) • Practise every exercise before each Training • 1 Day Practise per person plus 2 x 2 days delivery
Product Compliance Review (3 days) Benefit To the Company “Company will understand what legislation potentially affects their product, which requirements they have to comply with and overview of the method of proving compliance” • Deliverable (short report) • Understanding of Clients Product (Generic name, description, Intended Use, Main Materials and/or parts and HS Code) • Applicable Legislation • (List title all legislation and explanation of selection (list that you think do not apply, • Purpose, scope, main features (policy goals, essential requirements – list ones obviously not applicable) • Conformity Assessment Procedure (options) • Standards (harmonised) • GMP options • Markings and Model Declaration of Conformity • Assessment Plan for the company (adapted templates) • References to Guidelines and further help including the EU, the EU trade associations, Government Guides – give checklist and example URLs Report Annexes • Safety Assessment Template • Template for technical file Method Step 1. Understanding of Clients Product (time: 0.25 day) Step 2. Identify Applicable Legislation (time: 0.25 day) Step 3. Assess requirements for client’s product (time: 0.5 days) Step 4. Conformity Assessment Methods (time: 1 day) Step 5. Report and Preparation of Conformity Assessment Plan (time: 1 day)
Sector Seminars (10 days) Benefit To the Company “Companies will understand what legislation potentially affects their product, and can start the process of undertaking safety assessment and technical documentation preparation” • Deliverables (Presentation) Session 1: Fundamentals of EU Quality Infrastructure Session 2: OVERVIEW of EU Requirements for [DIRECTIVE OR PRODUCT] Session 3: Safety Assessment Session 4: How to Undertake Conformity Assessment Session 5: How to prepare documentation to Prove Compliance Handouts • Safety Assessment Template • Template for technical file Method Step 1. Identify Applicable Legislation (time: 1 day) Step 2. Assess the requirements for the client’s product (estimated time: 1 days) Step 3. Identification of Conformity Assessment Methods (estimated time: 1.5 days) Step 4. Preparation of Conformity Assessment Content and Technical File preparation (estimated time: 1.5 day) Step 5. Preparation of PPP’s and Trainers Manual (estimated time: 3 days) Step 6. Delivery of the Sector Seminar (2 days)
Individual Compliance (15 days) Benefit To the Company “Companies will have a draft technical file and plan to complete the conformity assessment requiring external expertise ” Deliverables (Draft Technical File) PART 1.General Information 1.1Company Name 1.2Product Description 1.3Applicable Legislation 1.4Date and version Part 2.Product Specification 2.1Design Description 2.2Bill of materials 2.3Traceability 2.4Material certification Part 3.Risk Assessment (Product Safety Report) 3.1Safety Assessment 3.2Standards 3.3Residual hazards 3.4Risk Management Plan (How to Address Identified Risks - only for those identified above) Part 4.Conformity of Production 4.1Production Method 4.2Quality Assurance Procedures 4.3Quality Manual 4.4Quality Certificates Part 5.Product Conformity 5.1Testing Facilities 5.2Compliance Results 5.3Test Certificates Part 6.In-use Guidelines 6.1Restrictions on use 6.2Instruction manual 6.3Labelling Method Step 1. Understanding of Clients Product (time: 0.25 day) Step 2. Identify Applicable Legislation (time: 0.25 day) Step 3. Assess the requirements for the client’s product (time: 0.5 days) Step 5. Understanding Clients Product – Factory and/or Production Facilities on site visit (1.5 days) Step 6. Technical File writing - Parts 1 and 2 (1.5 days) Step 7: Supporting the Initial Risk Assessment (Product Safety Report) (estimated time: 3 days) Step 8. Identification of Conformity Assessment Methods (estimated time: 5 days) Step 9. Drafting Part 4-6 of the TF and Discussions with Client (time: 3 days)
Group Compliance Programme (60 days) Benefit To the Company “Companies work together to have a draft technical file and plan to complete the conformity assessment requiring external expertise for half price ” Deliverables (Draft Technical File) PART 1.General Information 1.1Company Name 1.2Product Description 1.3Applicable Legislation 1.4Date and version Part 2.Product Specification 2.1Design Description 2.2Bill of materials 2.3Traceability 2.4Material certification Part 3.Risk Assessment (Product Safety Report) 3.1Safety Assessment 3.2Standards 3.3Residual hazards 3.4Risk Management Plan (How to Address Identified Risks - only for those identified above) Part 4.Conformity of Production 4.1Production Method 4.2Quality Assurance Procedures 4.3Quality Manual 4.4Quality Certificates Part 5.Product Conformity 5.1Testing Facilities 5.2Compliance Results 5.3Test Certificates Part 6.In-use Guidelines 6.1Restrictions on use 6.2Instruction manual 6.3Labelling Method Step 1. Initial research on the sector. Steps 2: preparation and Delivery of the “Where to Start Workshop” Step 3. Group Working Sessions on Categorization of Product and Scope of Risk that applies for specific Company product (expected only 1 session) [5 days for preparation, delivery and follow up) Step 4 Group Working Sessions on Technical File writing - Parts 1 and 2 (1 session expected only) (5 days) Step 5: Group Working Sessions on Supporting the Initial Risk Assessment (Product Safety Report) (likely to be 2 sessions) (10 days) Step 6. Group Working Sessions on Identification of Conformity Assessment Methods (likely to be 2 sessions) (10 days) Step 7. Group Working Sessions on drafting Part 4-6 of the TF and Discussions with Client likely to be 2 sessions) (10 days) Step 8. Organisation and management of Group
Service Delivery Plan Based on the agreed focus, define the operational structure and core features 4
Workshop Method KPIs – bottom up or top down, its maths (alter KPI, alter inputs and revenues) Delphi Technique For each service, we are going to work out: Full costs (mostly human resources) Estimate Assumptions Set pricing points (market versus actual cost)
Cost is not just Delivery (most Strategies fail because insufficient resource allocation) • KPIs depend on: • Number of Clients • Pricing Policy • Clients maturity (able to follow up) • Assumptions: • Refresh and update • Sustainability • Assumptions: • Conversion rates
✗ Resulting Delivery Plan
Short Consultancy (3 hrs) If asked, would you find requirements? How many per month???
