Product Stewardship in the Cloud
SAP PSN – Product Safety Portal Covers Entire Supply Chain
Up In The Clouds - Product safety specifications are increasing sharply around the world, and industrial enterprises must list the material composition of their products precisely as value chains also grow in complexity. To incorporate all partners securely in communications, cross-enterprise data interchange platforms are required. SAP's Product Stewardship Network (PSN) has since the end of 2012 provided an easily accessible cloud solution that confirms REACH and RoHS compliance by industrial products of all kinds.
More and more industrial enterprises are declaring all of the substances that make up their products. International original equipment manufacturers (OEMs) have set the trend. By declaring components in full they are preparing for a further range of legislation and industry standards that will specify which substances a product may not contain-standards such as the European regulation on Registration, Evaluation, Authorization and Restriction of Chemicals (REACH) or the RoHS directive for the electronics industry. In their wake come many non-European regulations that are geared to EU guidelines while also going their own way.
What all this regulation has in common is that its pace of development is extremely dynamic. Take REACH, for example. In 2013, 60 entries were added to its list of substances of very high concern (SVHC), equivalent to a 71% increase. The EU's European Chemicals Agency (ECHA) is currently looking into listing a further 30 candidates. At the same time, the pressure of investigation is on the increase as more and more supervisory authorities set up in operation across Europe. So it is no coincidence that RAPEX, the EU's early warning system for consumer protection, is triggering measures against dangerous products with increasing frequency. In 2012 alone, the latest year for which figures are available, the number of sanctions rose by 26% to 2,278.
To ensure that their products are marketable, more and more companies are deciding to collect all substance information. Their aim is to give their employees a maximum ability to provide information. Sales, Product Development, Procurement, and Service Management especially require a full view in order to rule out marketing risks reliably. But the validation process leads to substantial expenditure along the entire value chain. From chemical industry substance suppliers via manufacturing industry parts and components suppliers to the middlemen, OEMs need to incorporate an abundance of partners in their communications.
As most data suppliers and data users run totally different IT systems, value creation partners need a cross-system information interchange platform. That was why, at the end of 2012, the software provider SAP launched the SAP Product Stewardship Network (PSN) Internet portal. SAP PSN provides suppliers with a freely accessible cloud solution on which to make the latest substance information available to their principals at low cost. From the suppliers' viewpoint the portal serves as a knowledge base for their product safety. At the same time OEMs have at their disposal a Web-based communication platform from which they can retrieve missing information at minimal effort and expense.
"In the first year, 114 companies from Europe, North America, and Asia joined the network," says Randolf Hager, Product Manager Product Compliance at SAP. "They are a representative cross-section of the entire industry landscape, ranging from SMB parts suppliers via system suppliers and wholesalers to large chemicals, manufacturing and electronics industry corporations."
Companies can opt to make substance information for their products freely accessible for all portal users. Alternatively, the user group can be limited company-specifically. Data suppliers can thus choose exactly who is to be allowed to access their product information. As a consequence, other network participants can see neither the supplier nor his data. For data protection reasons not even SAP as the platform operator can read the encrypted data. "That," Hager says, "is why we have no figures for the total number of products listed on the portal. In view of the storage requirements, however, we can assume that the overwhelming majority of use cases is intended to provide information exclusively."
Data Interchange In Practice
Subject to their position in the value chain, users differ in the extent to which they make use of the platform. To cater for all requirement profiles, SAP PSN offers three access modules. For smaller data suppliers with a manageable product portfolio there is a free basic access offer. It enables users to declare their products' REACH and RoHS compliance manually. The portal assists with the declaration by showing users all substances that the two directives regulate. SAP adjusts the lists, which can be used interactively, as soon as the European Union makes regulatory provision for new substances. In addition to the declaration process, the basic access provides a number of messaging functions to enable network partners to communicate with each other.
Users who would like to automate substance-related data interchange can purchase a professional license for €1,500 a year. This paid access offers industrial users the additional opportunity to process mass data from their production control and supplier management systems. Excel lists serve as the interface. SAP PSN can extract automatically from them all of the basic data about their products, suppliers, and customers. The actual declaration consists of linking the basic data and details of which RoHS or REACH substances the product contains and their percentage by weight.
Clients who use SAP systems already can access automatically the data available in the cloud solution. SAP offers an enterprise license that enables them to do so. In combination with SAP EHS Management data interchange via the cloud can be controlled directly and entirely from the SAP backend. "Thanks to this integration, SAP users can communicate comfortably and securely with their supply chain partners without needing to change system. They stay in their accustomed work environment and can rely on the SAP PSN portal solution to control data interchange for them in the background."
The Product Stewardship Network notifies users by e-mail about transactions relating to them that take place in the network. While basic access users control communication manually, enterprise license holders have ways to automate the process. Messages accompany all milestones in the declaration process. Suppliers, for example, are prompted to input data. OEMs, in contrast, are informed as soon as new declarations are received. For this purpose every participant has a personal inbox. That is where a message is also sent when SAP has updated a substance list.
At the same time the PSN informs network users looking for information how up to date the listed declarations are. So users can see whether data suppliers have reacted to REACH and RoHS list updates by revising a previous declaration. That makes declaration history clear. SAP PSN maintains audit-proof data records.
Future Portal Development
"In the year since it was launched the Product Stewardship Network has already met with an extremely positive response," Hager says by way of an initial conclusion. SAP has taken the positive market response as an occasion to expand the cloud solution step by step. For one, additional mandatory substance lists are to be included. The first new addition planned for 2014 is the China RoHS, China's counterpart to the European RoHS directive. Companies will later be able to integrate customer-specific substance lists. There are further plans for the Product Stewardship Network to support the exchange of safety data sheets. With this service the portal will again be expressly targeting chemical industry companies. They will have a secure storage place from which to offer authorized customers comfortable access to the latest safety data sheets. "By expanding the information offering we aim to make SAP PSN the central hub of substance-related product communication," Hager emphasizes. "Industrial enterprises will have a constantly available secure platform on which to network their supply chain partners. The Product Stewardship Network will open up all of the information that users need to prove that their products are safe."
Sidebar: Secure Cloud Made in Germany
SAP runs the Product Stewardship Network at its own data center in St. Leon-Rot, Germany. An intrusion detection system monitors incoming data and identifies suspicious activities, while firewalls made by different manufacturers protect the data at the data center. Data files are exchanged with customers in an encrypted format. Data from cloud customers falls under the jurisdiction selected by the customer and is not forwarded to third parties. SAP's support services ensure that data protection is also maintained during required maintenance operations. At regular intervals, TÜV, KPMG, and SAP itself test whether the technology and infrastructure are operating smoothly. More information: www.sapdatacenter.com