compliance & Regulations
ADDRESSING THE DANGERS OF NONCOMPLIANT TOYS by PAUL CHEN, founder and principal consultant, PC Squared Consultants YOU ARE IN POST-PRODUCTION WITH A movie-branded toy. It’s 4:30 p.m. on Friday and everything is going smoothly. Demos are done, signage is hot off the press, and the toy will be ready to launch in two weeks. Then, the phone rings and a change in U.S. policies on paint regulations more than 6 months old disqualifies your toy from distribution. Now, you must determine what to do with 10,000 worthless units already halfway across the Pacific Ocean on their way to you. Welcome to a compliance nightmare. “Compliance” commonly refers to aspects of product safety and quality requirements. The definition of compliance varies, based on which authority is enforcing the regulation. Here are some common regulatory bodies: • Retail customers • Federal government • State and local governments • Certification bodies • Voluntary standards organizations MAKING COMPLIANCE A PRIORITY The regulations add up quickly. Regardless of what you must do to have a compliant toy, compliance is 100 percent necessary if you want to sell successfully— without recalls, fines, or lawsuits. Because requirements are always changing, the question should not be, “Are we compliant?” Instead, ask, “How do we remain compliant with all local, state, federal, retail, and other regulatory bodies?” It’s critical to stay up-to-date so that your company produces toys that retailers will sell and kids will love. Such imperative details need to be sorted out before the first batch is off the production line, if not earlier in the product development cycle. Compliance needs to be a factor every step of the way, including: • Product concept and design • Risk assessments
• Product qualification • Supplier qualification audits • Incoming raw materials • Quality assurance process and controls • Proper documentation for Customer Border Protection (CBP) inspection Sometimes a retailer’s programs, policies, processes, and expectations for compliance are hard to find. Keep in mind that they may still exist. If you’re not sure where you stand, you may not be asking the right people the right questions. It’s better to be diligent and ask questions upfront than to take the risk of losing business, paying the costly penalties for shipping delays and store fees to remove toys off the shelves, or—even worse—damaging the reputation and branding of your company. Without even factoring the initial costs, the long-term negative impact on your business will be crippling. KEY COMPLIANCE CONCEPTS Compliance can be overwhelming, so here are 10 hard-hitting questions to always keep in mind: 1. Can you provide a General Certificate of Conformity (GCC) or Children’s Product Certificate (CPC), as required by law for certain consumer products, within 48 hours of the request by the CBP or your customer? 2. Do you know how California Proposition 65 impacts the products that will be shipped to California? Do you know your customer’s expectations for California Proposition 65? 3. Do you know which products require third-party laboratory tests by law? 4. Are you familiar with which toys require testing, and the frequency of these tests? 5. Do you know what actions you should take if you receive a failing test report from a third-party laboratory? 6. Do you have all the relevant and most up-to-date testing protocols and product specifications for your customers?
106 THE TOY BOOK | september/october 2016 | TOYBOOK.COM
7. Do you know what a sample seal is and when it’s required or most appropriate? How do you know for sure that the sample sent to the third-party laboratory is representative of what is/will be on the market? 8. Do you know the most cost-efficient way to ensure your toys are in compliance? 9. How can you ensure that your contracted factory continues to do a good job? Is your own staff a third party conducting pre-in-line and/or final production inspection? 10. Are you taking measures to ensure that your toys continue to be in compliance until at least the end of the product lifecycle? If you are unsure or unable to answer any of these questions, then there is a good chance you need to do more to protect the best interests of your company. The cost of noncompliance is devastating, but the benefit of proper compliance is priceless. »
Paul Chen is the founder and principal consultant of PC Squared Consultants. After 13 years in the consumer products industry, Chen saw a need in the retail supplier community for independent and confidential compliance consulting. He protects the interests of companies and offers guidance on product regulatory compliance, quality assurance, and laboratory testing.