Here’s a closer look at the extent of manufacturing regulations and how to ease the burden of compliance.
What regulatory challenges do manufacturers face?
In a 2017 report, the National Association of Manufacturers (NAM) revealed that the industrial sector faces almost 297,696 restrictions on their operations due to federal regulations. Since 1981, the federal government has issued at least one manufacturing-related regulation each week.
The cost of doing nothing when it comes to compliance issues is extremely high. Even a minor slip can compromise safety and result in significant fines.
Consider the most recent OSHA penalties for willful violations, which range from nearly $10,000 to nearly $135,000.
Repeat violations that occur within a three-year period can result in fines of $1 million or more—and that doesn’t include lost opportunity costs.
A.T. Kearney conducted a study on how manufacturing companies can avoid financial and reputational damage due to non-compliance.
The survey polled 40 leading manufacturers across industry types and sizes. One of the key findings was that the most effective compliance systems integrate compliance with business processes. In fact, 70% of respondents saw integration as a major contributor to the successful implementation of compliance programs.
Which OSHA regulations apply to manufacturers?
OSHA regulations aim to protect workers and reduce safety-related workplace injuries in multiple industries, including manufacturing.
According to the U.S. Bureau of Labor Statistics, there were 395,000 nonfatal injuries in the manufacturing industry in 2018, meaning injuries affect more than 3 out of every 100 employees in this sector.
In addition to recently increasing its fines, OSHA switched from repetitive inspections to more rigorous inspections, which increases the possibility of higher penalties.
A few common OSHA safety violations include:
- Failing to train employees on OSHA guidelines and maintain comprehensive documentation of training
- Failing to sufficiently monitor equipment for failures that lead to safety risks, such as scaffold surfaces that cannot support the required load
- Failing to label hazardous chemicals and equip workers with safety data sheets
- Failing to follow lockout-tagout (LOTO) standards that keep equipment from restarting during maintenance
Current Good Manufacturing Practice (CGMP)
The Current Good Manufacturing Practice (CGMP) regulations, which fall under the Food and Drug Administration (FDA) standards prescribed in Title 21 CFR Part 11, focus on improving the quality of pharmaceutical drugs.
These specify minimum requirements for the methods, facilities, and controls used in the manufacturing, processing, and packing of drug products.
Under the guidance of the FDA, CGMP focuses on five key areas:
- Establishing strong quality management systems
- Obtaining appropriate quality raw materials
- Establishing robust operating procedures
- Detecting and investigating product quality deviations
- Maintaining reliable testing laboratories
By enforcing these measures, CGMP assures consumers that the drugs they consume meet quality standards.
The FDA publishes many instances of cases where sufficient testing was not performed on the products or evidence was not provided. These violations could result in huge product recalls and heavy penalties for manufacturers. GlaxoSmithKline, for example, had to pay out a $3 billion settlement for violations that included failing to report drug safety data to the FDA.
In most cases, violations occur because of negligence. Some common causes include:
- A lack of well-defined standard operating procedures and quality assurance processes
- Insufficient training on manufacturing procedures
- A lack of audits and missing “proof of process” documentation
- Failure to continuously monitor processes and equipment, leading to quality lapses
Are there other regulations for manufacturers?
Specific industries within manufacturing also have their own regulations. Government contracting, for example, is subject to additional guidelines.
When executing a government contract, every phase of your manufacturing process is under scrutiny. Any breach of trust can result in the loss of millions of dollars in business.
Medical device manufacturers must also establish and follow quality systems that include CGMP, as well as international standards including ISO 9001:1994, which oversees quality assurance in the “design, development, production, installation, and servicing” of medical devices, as well as supplementary requirement including in ISO/CD 13485.
These regulations do not give specific guidelines for how manufacturers should ensure quality. Instead, they provide a framework and allow individual manufacturers to use their best judgment.
However, it’s important that whatever processes manufacturers use to ensure quality, they are well-documented—ideally, in a centralized, digital format.
How does asset management software ensure regulatory compliance?
Asset management software is a centralized system that allows manufacturing leaders to track all information related to their physical assets. Because it’s designed to support the entire lifecycle of each piece of manufacturing equipment, from procurement to disposal, it can help you ensure compliance at every stage. That includes:
- Maintaining integrity during procurement by maintaining rigorous audit reports
- Keeping track of preventive maintenance activities
- Performing condition-based maintenance (also known as predictive maintenance) with routine inspections to detect anomalies in temperature, friction, and other areas
- Managing work orders to ensure quality control
- Maintaining a record of employee training
EAM software’s ability to monitor assets in real time using IoT sensors can give you added protection against regulatory penalties. For example, you can configure alerts for breaches on specific parameters—such as notifying you if a machine is operating outside normal temperature ranges, which may indicate the engine is overheating.