Compliance blues prove boon to ERP, content management, other vendors
By Paul Mann, contributing editor -- Manufacturing Business Technology, 4/1/2004 12:00:00 AM
After years of tepid growth, IT systems vendors have a new ally of sorts: the Sarbanes-Oxley Act of 2002, and a host of other compliance pressures.
Faced with regulations from the U.S. Food & Drug Administration (FDA) and other regulatory bodies in the U.S. and Europe, manufacturers are turning to some of the same software vendors that help them manage enterprise and production management data for compliance needs.
The reason isn't hard to understand: the definition of compliance is expanding. "Compliance isn't just driven by government agencies. It's also driven by monster channel masters," says John Hagerty, a VP with Boston-based AMR Research. "If Wal-Mart mandates that you put [RFID] tags on each piece, you don't have the choice of opting out if you want to keep doing business with them.
"There is a lot of support for manufacturers in the areas of interpretation, hardware, standards, and software," Hagerty continues. "Over time, a grand alliance of all these will come together, but in the interim, manufacturers will have to assemble piecemeal solutions."
ERP systems—called the "backbone" system for enterprise transactions and planning—play a central role in compliance issues. IFS, an ERP vendor with European roots, has a long history of compliance support.
"From the regulatory side, we offer a lot of track-and-trace capabilities to meet requirements for manufacturers in aerospace and defense, and in medical devices," says Webjorn Bergman, manager of IFS's medical devices industry group. "And if Wal-Mart says you need 100-percent quality on every part you deliver, we provide the framework to monitor and document your product-quality initiatives across the supply chain."
Equally important is the ability to monitor quality in outsourced production environments. IFS offers a Web portal solution, and support technologies such as message-oriented middleware and Web services to facilitate information exchange. "Because many companies no longer have hands-on control, they need tools to impose and monitor quality standards at outsourced facilities around the world," Bergman says.
Of course, ERP vendors do not have a corner on the compliance market. FileNet, a provider of electronic content management software, recently rolled out its new Compliance Framework. This framework integrates solutions suites, including records management, forms management, content management, and collaboration.
While the new framework was specifically targeted at compliance with Sarbanes-Oxley, FileNet sees broader applications. Says Chris McLaughlin, director of financial services marketing, "This framework incorporates capabilities to deal with Sarbanes-Oxley, but it also has the flexibility to incorporate new legislative requirements coming down the pipe. We can monitor material events across the enterprise and, with our built-in connectivity capabilities, kick off a controlled response within the organization."
Industrial automation software vendor Citect comes at the compliance challenge from a 30-year history in supervisory control solutions. While vendors at this level must help manufacturers comply with FDA regulations—including Part 11 requirements governing the use of electronic signatures—plant information management applications have a more pervasive tie to compliance, says John Cavalenes, a Citect applications specialist.
"The landscape has changed," says Cavalenes. "Pretty much all manufacturers now have to comply with customer requirements, from a quality and delivery standpoint. Validation of that is, in many ways, as strict as is FDA compliance in the pharmaceutical industry. This is forcing manufacturers to implement a whole new level of systems on the floor to detect and analyze problems. If you can't do that, you won't be in compliance and you won't be profitable."
The compliance tools offered by Citect are embedded across the suite of track-and-trace, maintenance, and industrial information management modules. "This gives manufacturers the tools to meet existing and emerging requirements," Cavalenes says. The same set of industrial information management software, he adds, can help an automotive supplier meet quality requirements imposed by an OEM, or help a meat processing company adhere to disease-prevention regulations coming out of Europe.
