The Consumer Product Safety Improvement Act (CPSIA) debate is heating up once again as another key deadline approaches in FebruaryBack in December 2009, the CPSC decided to extend a stay on certification and third party testing for children’s products subject to lead content limits until February 10, 2011. Under this decision, products must still were required to meet the limits for lead composition, but the need to demonstrate certification and third party testing was extended to apply only for products manufactured after February 10, 2011.   There is a growing debate about whether the deadlines should be extended further.

One of the key provisions of the CPSIA legislation is that manufacturers are required to make General Certificates of Conformity (GCC) available to retailers and distributors.  The certificates attest to compliance with the law and its principles to minimize the use of toxins such as lead and Phthalates in children’s products.  A GCC must include not only the product and importer, but also its date and place of manufacture as well as its date and place of testing.  State Attorney General Inspectors can audit stores and demand to see proof of testing certificates, which retailers must produce within 24-48 hours.

CPSIA – Of Course, there’s an app for that (Source: Intrek)

The management of certificates for CPSIA illustrates one of the common challenges with information exchange in the supply chain.   The easiest way for a supplier or distributor to comply would be to post their certificates to a secure web portal.  Retail customers could be notified of the URL and offered credentials for accessing the certificates posted on the supplier’s site.  Of course, the challenge with such an approach is the burden placed upon the retailer.  To ensure compliance retailers would need to log in to hundreds of supplier portals weekly to download and/or verify the appropriate certificates. 

An alternative approach to managing certificates is for retailers to request that the suppliers push the certificates directly to them.  The certificates could be exchanged via an e-mail message, file transfer or manual file upload to a retailer’s portal.  While greatly simplifying the process for retailers, such an approach creates a significant burden for suppliers.  Suppliers must create a process for routing certificates corresponding to specific lots to each retailer.  Such a process is highly error prone.  If a supplier routes the certificate to the wrong retailer or fails to transmit certain certificates than both parties could be non-compliant with the regulations. 

Movement to Amend the CPSIA

CPSIA conformity certificates would not be the first documents to be exchanged using such an inefficient, point-to-point model.  Retailer compliance guides for shipment labeling, carrier routing and EDI policies are shared via supplier portals today.  An alternative and more efficient model would be to create a centralized clearinghouse for the exchange of CPSIA certificates.  Suppliers would publish all certificates to a centralized location, tagging each with details such as the product name (GTIN) and recipient of the goods (i.e. the retailer).  Retailers would be able access all the GCCs in one central location for all suppliers and all product categories.  Of course, security procedures would need to be enforced to ensure that retailers only have access to the certificates for products which they ultimately received.  A centralized clearinghouse simplifies the process for both the retailer and the supplier.  Each party has a single location to publish or subscribe to certificates thereby reducing the level of effort required to comply and lowering the probability of errors. 

Not this kind of Clearinghouse

Enterprise Community Management vendor, Rollstream, has developed such a clearinghouse, which it calls the Certificate Exchange Network (CEN).  The CEN is an online platform where manufacturers can post or link to existing certificates of conformity directly.  Retailers can then download on demand any product certificate needed to demonstrate CPSIA compliance.  Through a partnership with National Association of Chain Drug Stores (NACDS), Rollstream has already achieved significant levels of adoption amongst grocery, chain drug and mass merchandise retailers and suppliers in the pharmaceutical and consumer products segments. 

Despite on-going lobbying efforts of selected manufacturers and retailers, it seems unlikely that the CPSIA will be repealed any time soon.  As the February deadline approaches it will be interesting to see if the focus amongst industry participants shifts towards ensuring compliance with the regulations.  Solutions such as the Rollstream CEN certainly provide an example of how technology can be used simplify the administrative burden for all parties.

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