When Does It Make Sense to Implement an FMD Program?

When Does It Make Sense to Implement an FMD Program?

When does it make sense to implement a full material disclosure (FMD) program? 

The obvious answer may be when a company has a simple supply chain and products. For example, the FMD implementation process for a part such as a single resistor is very simple, as there is a small amount of data to manage. An average resistor will only contain about six substances. 

However, the more complex the supply chain and products, the more valuable an FMD program becomes. Building an FMD program for complex assemblies and products with several tiers of suppliers is much more difficult, but also demonstrably more cost-effective than other approaches to compliance. 

When determining whether an FMD program should be implemented, the total volume of product shipped doesn’t make a significant difference  — as long as bills of materials (BOMs) are well controlled, scale is a lesser challenge for compliance. Supplier count, number of supplier locations and BOM complexity are instead the key drivers for the decision. 

Read more about Brian Martin’s experience with FMD programs in our eBook, Full Material Disclosures: Building Resilience With Data.

When products have complex assemblies and parts are sourced from various tiers of suppliers, they are more likely to be affected by shifts in the market and regulatory landscape. The nature of your company, supply chain and rate of change are all important factors to consider when determining whether you should have an FMD program. 

When suppliers receive requests for FMDs, they may object because of the up-front work required. However, the decision to implement an FMD program should not be based solely on this factor. An FMD program will actually result in lower long-term effort for suppliers. 

If the cost involved in responding to changing regulations is greater than the cost of managing an FMD program, the math is simple — implementing an FMD program is a smart business decision. 

If the process of starting the program seems daunting, remember that intelligent outsourcing is the biggest enabler for these types of programs. Outsourcing can reduce the cost of implementation by more than half.  

Implementing an FMD program is difficult, and requires up-front effort. But in the long run, when it makes sense, it’s an efficient, cost-effective way to manage compliance. 

In his former position with Seagate Technology, Brian Martin managed global EHS and sustainability. He was responsible for all aspects of Seagate’s environmental and sustainability programs, as well as its global occupational health and business continuity programs. Brian has worked in a variety of roles, including research and development, sales and marketing, supply chain management, finance, and service supply chain. In addition to Seagate, he has held positions at IBM, Akashic Memories, Phase Metrics and HGST. 

Assent’s Full Material Disclosures Module allows companies to streamline data collection, educate suppliers, and efficiently manage data. To learn more about Assent’s solution, email info@assentcompliance.com