July 8, 2024 Navigating Today’s Complex Regulatory Landscape

Navigating a complex regulatory landscape is one of the biggest challenges for organizations in the manufacturing industry.

Today, the ever-evolving nature of regulations requires organizations to be vigilant and flexible, often involving substantial investments in human and technological resources. And striking a balance between compliance and technological innovation can lead to security concerns and operational difficulties, particularly as organizations become increasingly data driven.

For example, companies that fall under regulations such as 21 CFR Part 11 or ISO 27001 are highly restricted in their choices for cloud computing options – having to meet requirements around traceability and accountability.

But adhering to regulatory standards also presents opportunities as it can help businesses boost efficiency, lower costs, improve quality control and adopt more robust cybersecurity and data integrity measures.

Requirements for data integrity

As a globally recognized standard for information security management systems, ISO 27001 is relevant for organizations that handle or manage their customer’s data. It provides a systematic approach to ensuring the confidentiality, availability, and integrity of data.

Some of its key elements include conducting a risk assessment, establishing information security policies, implementing security controls, and having a system in place to continuously monitor and improve the organization’s information security management systems.

Implementing ISO 27001 benefits organizations in several ways. To start with, proactively addressing vulnerabilities and threats helps businesses identify, assess, and mitigate information security risks. The standard’s holistic approach also helps organizations to maintain the trust of stakeholders and customers: The certification demonstrates that an organization is committed to maintaining security best practices.

Title 21 of the CFR Part 11 applies to FDA-regulated organizations including food and beverage manufacturers, medical device manufacturers, pharmaceutical and biotech companies. It establishes regulations on electronic records and signatures to ensure their reliability, integrity, and authenticity.

These guidelines have become increasingly important in the age of digitalization – providing a framework for the secure use of electronic systems. Under CFR Part 11, organizations must implement controls, including audits and audit trails, system validations, electronic signatures, and documentation for software and systems that they use to process electronic data.

Organizations doing business in Europe may also be subject to the General Data Protection Regulation (GDPR), while those that sell to customers in California and meet certain revenue or data handling thresholds may be subject to the California Consumer Privacy Act (CCPA).

Typical compliance challenges

Manufacturers face a unique mix of challenges due to regulatory complexity, evolving standards, and the rapid adoption of new technologies. Navigating multiple agencies and global standards and keeping pace with requirements requires substantial time and effort, although new digital technologies with compliance features can streamline many processes.

Data integrity and security poses another challenge, especially since more and more organizations are transitioning to electronic records systems and the rapid adoption of new technologies can lead to vulnerabilities. Sensitive data is an obvious target of increasingly sophisticated cyber-attacks. A single breach can be devastating, leading to the loss of sales, trust, irreparable brand damage, and serious liability. For example, the 2023 attack on Clorox is estimated to have cost the manufacturer 356 million USD.

Managing compliance across complex supply chains that involve many stakeholders presents a significant challenge. Technologies with data management and analytics capabilities, blockchain technology, and barcodes, and radio-frequency identification (RFID) can play a role in managing supply chain compliance.

In addition, organizations must ensure the quality and safety of products through robust quality control measures, product testing, and adhering to the standards set by regulatory bodies. As part of this, they must prepare for potential supply chain disruptions, such as material shortages, transportation issues, or geopolitical events. Effective risk management involves assessing these supply chain risks and mitigating them to ensure a consistent and reliable flow of critical materials.

Other areas where risk management strategies are needed include reputation management, market competition, and environmental and security concerns. Any negative publicity related to issues such as defective products or recalls can result in a loss of business or trust, as well as stiff regulatory fines and potential lawsuits.

The road to compliance

While standards like ISO 27001 and 21 CFR Part 11 help lay the groundwork, achieving compliance requires a multifaceted and strategic approach. The following steps can help organization become and stay compliant:

Stay up to date on the latest regulations as they can change often. It is important to regularly monitor state, federal, and international regulations and standards that impact the industry. Selecting a compliance solution that is regularly updated by industry experts to comply with the latest regulations can help.

Build resilient supply chains. Establish relationships with reliable suppliers and adopt strategies to make your supply chains more resilient. For instance, developing contingency plans for disruptions. In addition, new digital technologies can make it easy to streamline time-consuming and tedious traceability tasks.

Conduct routine audits. Regular internal audits and assessments help ensure that processes are effective and align with regulatory requirements. They also help identify potential areas of improvement and take corrective action to mitigate compliance risks. If an organization is ISO 27001 certified, conducting routine audits is a requirement to keep the certification.

Train and educate employees. Employees should receive routine comprehensive compliance training to ensure that they are up to date on the latest data protection, safety protocols, and any regulations that apply specifically to their roles. Invest in upskilling and retaining staff to mitigate ongoing talent shortages.

Implement robust data protection measures. Develop comprehensive data protection policies to ensure that all sensitive data is kept private and secure. Some examples of effective data protection measures include data encryption, access controls, and vulnerability checks to minimize the risk of data breaches.

Establish a compliance culture. Foster a culture of compliance by emphasizing and thoroughly explaining its importance at all levels. Develop processes to encourage open communication to report potential compliance issues and ensure that employees understand the consequences of non-compliance.

Prioritize quality control. Implement robust and stringent quality control measures throughout the production process. Ensure that you regularly test products for compliance with applicable safety and quality standards. Address any issues that arise to prevent potential regulatory violations.

Seek legal and regulatory assistance. Consult with legal and regulatory experts to receive guidance on which regulations apply to your organization, what those regulations require, and the measures that you can implement to ensure continued compliance.

Monitor and evaluate performance. Identify and adopt key performance indicators (KPIs) to help you routinely monitor and evaluate compliance performance. For example, you could track the percentage of employees who have received compliance training. Use these metrics to identify trends, measure the effectiveness of your compliance initiatives, and make continuous improvements.

Technology can help

In many ways, investing in the right digital technologies is the most important step that organizations can take toward becoming and remaining compliant. These solutions can streamline time-consuming tasks while eliminating the occurrence of costly errors. They allow organizations to streamline reporting processes, improve data accuracy, monitor key compliance metrics, and implement proactive maintenance strategies to ensure that equipment is always performing at an optimal level.

All of this can help organizations master the increasingly rigorous regulatory demands, leverage the frameworks to improve processes, and manage their facilities and equipment in a compliant manner while remaining competitive.

About the Author:
As Chief Product and Technology Officer, Richard Leurig is responsible for the Accruent global engineering, product and information security teams. Richard is an accomplished executive with nearly 30 years of experience driving customer-focused and commercially successful innovation in complex product and technology portfolios for several major organizations.

Prior to joining Accruent, Richard served as CTO & SVP Products & Partnerships at ResMan Property Management Software, SVP of Innovation & Technology at CoreLogic Real Estate Data & Analytics, CIO at MoneyGram International, and Co-Founder of Route7 Solutions, a real estate and mortgage software and digital workflow consulting and product startup.

Richard holds a Bachelor’s degree in business from Our Lady of the Lake University in San Antonio, Texas.

Subscribe to Industry Today