Regulatory compliance isn’t a “loved” word for most industries, especially manufacturing industries. In fact, the mere mention of “compliance” is enough to create panic amongst manufacturing industries as they scramble to reassure compliance against various complex regulations. The panic and anxiety of manufacturing businesses to ensure regulatory compliance is understandable; given the fact that there are multiple complex regulations to comply with. Also, any complacency in compliance (one bad audit, or lowly inspection) may cost businesses massive financial losses, as well as, administrative penalties; not to forget the blemishing scar it may leave on the company’s reputation.
In an ideal world, regulatory compliance may seem to be a linear process, for businesses may continue operating as they have always to remain complaint. However, the reality is far from the ideals and seasoned leadership understand the various complexities and intricacies involved in regulatory compliance. The regulatory landscape is ever-changing, and to make it more challenging for businesses the technological advances make it compulsory for a business to remain vigilant and adaptable to ensure compliance with regulation and promote a safe working environment in the company.
Now, there is little debate on whether manufacturing businesses need to take compliance seriously. Instead, the bigger debate is, how businesses can implement manufacturing compliance the right way, to create a safer and healthy work environment, as well as, keep up with the daily operations.
That’s where Enterprise Resource Planning (ERP) system comes into play. In today’s digital age that’s driven by automation, ERP platforms bring a host of viable, and high-utility functions for businesses to keep up with compliance tracking, while also maximizing the efficiency and productivity for business operations. ERP systems bring in automated and fully integrated features for companies to ensure compliance tracking for all relevant regulations. Also, by seamlessly integrating various business functions, the platform helps companies to ensure higher productivity, minimize errors, as well as, reduce production costs by avoiding labor-intensive manual processes.
What is compliance tracking?
Now, before we explore the potential of ERP as compliance tracking systems, it’s better to adequately define the compliance tracking, so as to set realistic expectations for the ERP platforms.
To put it simply, compliance tracking refers to the process of gathering, structuring, and monitoring all relevant compliance-related information to ensure there are no cracks or loopholes in the business functions. The process of compliance manufacturing tracking system is also responsible to ensure compliance requirements are met as per the regulations of the Environmental Protection Agency (EPA), Occupational Safety and Health Administration (OSHA), and any other mandatory regulation that should be met. Ideally, compliance tracking systems should also keep track of internal & external audits and inspections.
With an ever-changing regulatory landscape, a robust and comprehensive compliance tracking system ensures that the company is kept informed of the latest changes, as well as, understand the scope and impacts of regulations on the business.
What is a compliance system?
A compliance system refers to an integrated process that involved automated controls, tools, functions, processes, and written documents required to assist organizations in keeping up with the legal requirements of the industry, as well as, to create a safe and healthy work environment.
The role of ERP software in compliance tracking
The conventional approach for compliance tracking includes a manual approach, where spreadsheets, papers, and files were used to keep up with the compliance requirements. However, as can be expected, not only this approach is hugely inefficient, but also significantly prone to errors. Also, the approach didn’t have the means required to keep track of the progress over time or to collect and manage relevant data. This greatly makes the efficiency, and accuracy of the manual compliance tracking process questionable, as there always remains a risk of missing out on crucial details, which may impact the health, and safety of the organization.
Contrarily, ERP systems bring a digital and automated approach to compliance tracking that’s not just fast, but also highly accurate, and reliable as compared to the manual approach. The ERP systems over time have greatly improved in terms of features, and functionalities, bringing in advanced compliance tracking features to keep up with the regulatory changes. Today, manufacturing companies are integrating ERP platforms with legacy systems to create a more comprehensive and inclusive manufacturing tracking system. Below are some benefits of ERP systems for manufacturing compliance tracking;
Keep focused on industry-specific regulations
There are two separate categories of regulatory requirements for businesses including; general regulations, and industry-specific regulations. Businesses are required to understand, master, and comply with all of the general regulatory requirements; however, there are certain specific requirements, which only pertain to exclusive industries.
Now, amongst the various compliance requirements, the best way is to master your industry-specific requirements at first. In this regard, an ERP system can greatly help businesses to track exclusive industry-specific compliance requirements and ensure ongoing compliance.
Greater visibility and control
Compliance offers companies a direct view into the company’s performance against specific regulations. By tracking and meeting compliance requirements, businesses can be sure to meet and exceed industry standards in all aspects, from the quality of raw materials to superior production processes. ERP systems enable companies to house all of the crucial data safely and easily accessible for better assessment of the company’s performance against compliance requirements, as well as, to make any necessary adjustment needed.
Protect the company’s data
Cybersecurity is one of the biggest threats to all online businesses. The frequency and magnitude of cybersecurity attacks are skyrocketing as every year passed. Just in 2018, cybersecurity issues cost businesses across the world more than USD 45 billion in damages. In this context, businesses need to comply with the regulatory requirements regarding data protection, and security.
ERP systems for once act as data repositories holding massive amounts of crucial business data that includes personal, and financial information. However, most of the modern and well-established ERP systems also act as the first line of defense against cybersecurity threats. These central data repository platforms come with robust and advanced security measures defending companies against any potential breaches.
ERP system also offers businesses multi-level security options like leveled accessibility, user controls, and others to ensure that the vital business data remain protected and secure at all times.
Create a digital paper trail
Traditional paper trails may be good enough for businesses to keep compliance tracking at hands, however, there is no way this approach can be of any use for businesses to develop deeper insights into the data.
As a general rule, manufacturing compliance tracking is all about companies being able to answer who, what, and when with confidence. An ERP system enables businesses to digitize all relevant compliance requirements while keeping a unified source of truth for everyone including stakeholders. This not only helps companies keep up with their compliance tracking obligations, but also improves reputation, and transparency into its processes. With ERP software integrated into the workflow processes and systems, it’s easier for businesses to adequately document each and every activity, and offer greater transparency to all stakeholders.
Mitigating risk for manufacturers
Regulatory compliance is often paired with risks, that’s because any complacency with the regulatory requirements may lead to hefty penalties and losses for companies. Apart from financial losses and penalties, businesses may also be slapped with administrative penalties; not to forget about the loss of reputation.
However, more than anything else, non-compliance to industry-standard regulations puts companies at greater risk of compromising the health and safety of their people and surrounding. While the varying regulations may seem puzzling, and complex, it’s important to remember that regulators got the numbers, and research to back the changes in regulations. Most of the time, regulations are made or changed to keep up with the health and safety of the people. Regulators make use of their research, experience, and statistics to regulate the industries in order to create a safer, and ethical work environment. On part of manufacturing companies, failure to comply with these regulations not only poses a risk of penalties, but also compromises the health and safety of its people, and the community at large.
Not to forget, failure to comply with industry-standard regulations lead to integrity and reputational loss for companies. That’s because by large regulatory requirements are meant to ensure that companies operate under a defined set of rules which are deemed safe, ethical, and fair by the industry. Noncompliance, on the other hand, is regarded as synonymous with the breach of integrity and ethical behavior on part of the business.
Manufacturing companies can greatly benefit from a well-integrated and automated ERP system that can help them to mitigate all general, and industry-specific risks. Also, instead of relying on manual processes (calculations, and data entry), digitizing the processes ensure there are minimum errors by removing all the guesswork for compliance-related activities.
What can compliance tracking do for your business?
Perhaps the greatest benefits of compliance tracking are the assurance of following the highest industry standards, and the peace of mind that comes with it. Companies tend to outperform their expectations when the workflow processes are streamlined, accurate, and comply with all relevant regulations. The assurance that comes with compliance tracking enables companies to maximize operational productivity to achieve greater revenues. Some of the benefits of compliance tracking for manufacturing businesses include;
Reduce compliance cost
As mentioned earlier, regulatory compliance may be an overwhelming task for businesses. Without adequate systems and tools, complying with the regulatory requirement may consume too much time and resources to eventually hurt your operations and processes.
With a standard and comprehensive ERP software integrated into business processes, it’s easier for businesses to track and manage regulatory changes while minimizing the costs associated with compliance. ERP system acts as a unified platform, which can be relied on to analyze and monitor what’s exactly going on across all business functions to achieve greater efficiency without compromising on the compliance standards.
Maximize internal resources
When the internal resources of the company aren’t wasting their time to figure out compliance, they can be used to carry out more productive tasks related to achieve the business bottom line. Also, since the loss of time equals to loss of money for businesses, ERP systems essentially assist businesses to maximize internal resources for higher revenues.
Create a stronger corporate culture
As mentioned earlier, regulatory standards aren’t just meant to irritate businesses, rather they are meant to assist businesses in achieving a healthier, and safer work environment. With an ERP system integrated into the workflow processes, companies are able to get more focused on building a strong corporate culture that revolves around the safety and wellbeing of their people. Also, when workers feel they are protected and taken care of, they tend to relate to the company’s objectives, thus creating a more dynamic, and positive corporate culture that harnesses better revenues for the business.
How Folio3 can help with compliance tracking for the manufacturing industry?
While Enterprise Resource Planning (ERP) may seem to be the ultimate solution for businesses to achieve compliance tracking, Before you make a move to implement an ERP system into your business processes, make sure you understand the scope of track compliance required by your company, and set realistic expectations.
Also, the process of ERP implementation isn’t linear, instead, businesses need to choose the right partner ERP implementation partner who understands your business need and is able to come up with customized solutions.
As one of the leading ERP implementation partners in the USA, Folio3 has the skills, expertise, and resources to assist you in exploring the best ERP options available to meet your unique business needs. Our ERP implementation experts have successfully delivered hundreds of ERP implementation projects of all sizes, and have in-depth knowledge and experience to offer customized solutions. Get in touch with our sales representatives today to schedule a consultation and let out experts help you improve manufacturing compliance tracking for your business.