A consultant’s take on Product Compliance for Discrete Industries: Part 2 – What makes up a Compliance Product Structure?
This blog post belongs to the series “A consultant’s take on Product Compliance for Discrete Industries”.
Part 1: Trends, Requirements, Challenges and A Single Source Of Truth
Part 2: this post
What is a compliance product structure?
A compliance product structure (hereinafter: CPS) is the structure of a product which contains all relevant information in order to assess the compliance of this product for all applicable product compliance requirements. Other more or less commonly used terms for this structure are “Bill of Substances”, “Substance BOM”, and “Compliance BOM”.
How to build a compliance product structure?
As a starting point, it makes sense to take the Bill of Materials (BOM) of the product. Dependent on the stage in the product lifecycle and the configurability of the product, there are different BOM types to use. Below the most common ones:
- Engineering BOM: For new products that are in development and for which a production BOM does not exist yet. Why is a CPS required at this stage of the product lifecycle? Because a product needs to be compliant for some regulations, like e.g. EU RoHS, in order to be sold in a certain market or region.
- Production BOM: For products that are already in production.
- Order BOM: For products that are already in production and whose configuration differs significantly dependent on the sales order.
BOMs usually are made up of multiple levels. The general guidance for the creation of a CPS based on a multi-level BOM is to explode it down to the lowest level and then apply certain filter criteria to it. Below the most commonly used filter criteria:
- Certain BOM item categories, like documents or software, usually are not relevant for Product Compliance assessments
- BOM positions with negative quantities can be filtered out
As a next step, the filtered BOM is enriched by additional information that is usually available in an ERP system:
- For purchased parts: the relevant supplier (or suppliers, in case of multi-sourcing)
- For assemblies produced in other plants: the exploded BOM of the assembly.
The final step is then to enrich the CPS with the actual compliance information. This is usually done on the lowest levels of the CPS, meaning either supplier parts or raw materials. Two approaches can be differentiated for this activity:
- If a self-declaration is possible: Attach relevant documents (e.g. laboratory test results) and/or assign basic materials to the components
- If a self-declaration is not possible: Reach out to the supplier of the component and maintain the received information accordingly in the CPS.
Stay tuned for the next part of this blog post series, where I will show with an example how you can solve typical challenges in making up a good compliance product structure.