Welcome to the third post in this new blog series that explores the top challenges facing manufacturers in construction-driven markets, and how to meet them head on. As a reminder, we're talking manufacturers of:
- Architectural and structural metals
- Cement and concrete
- HVAC equipment
- Lighting equipment
- Paint and coatings
- Plastic resin and synthetic fibers
- Switch, connector and other wiring devices
- Windows and doors
- Wood products
Challenge #3: Regulatory and Environmental Issues
The Small Business Administration's Office of Advocacy recently estimated federal regulation to cost more than $1 trillion annually. The study found that United States manufacturing comprised $162 billion of the $648 billion burden of environmental, economic, workplace and tax compliance regulation. Dollars spent by manufacturers on regulatory compliance with cumbersome or duplicative regulations are dollars not spent on capital investment or incorporating new capabilities into their organizations to address enterprise needs.
So what does regulatory and environmental issues impact the different manufacturers of building products?
Architectural and structural metals manufacturers must maintain compliance with increasingly stringent air, water and hazardous waste regulations. The costs of compliance and potential liability from accidental spills can be especially difficult for small companies. As larger companies acquire regional suppliers, they may inherit Superfund liabilities for cleanup of hazardous wastes improperly disposed of in the past. The issue persists across increasingly extended organizations.
Growing public awareness of health and safety issues has increased scrutiny of plastic resin and synthetic fiber manufacturers. These manufacturers are already subject to numerous regulations governing the production, disposal and cleanup of hazardous chemicals. Companies may be held civilly or criminally liable if their products are found to cause harm to human health or damage the environment.
Cement and concrete manufacturers must be aware that quarrying and manufacturing construction materials can produce significant environmental pollution. Increasingly of concern, the cement industry produces 5 percent of global man-made carbon dioxide emissions. In addition, dust of various sorts (some hazardous), emissions from burning fuels and various solid waste products are subject to increasing government regulations.
Manufacturers of HVAC and commercial refrigeration equipment are subject to regulations regarding pollution, energy efficiency and the use of refrigerants, both in the U.S. and in various foreign markets. Changes in energy efficiency standards or regulations governing the use of refrigerants can greatly impact what kinds of products companies can develop and sell. New Department of Energy efficiency standards for some HVAC products are scheduled to take effect in 2013 and 2015. The U.S. Congress and the Environmental Protection Agency (EPA) are also reviewing ways to limit the future use of hydrochlorofluorocarbon (HCFC) and hydrofluorocarbon (HFC) refrigerants.
Paint and other coatings manufacturers may have difficulty meeting air quality, water and waste disposal regulations due to the inherent nature of their products. In some cases, paint manufacturers may have liability for Superfund sites. Many older paint production facilities are also contaminated and workplace air quality standards are also an issue for this sector.
How Microsoft Dynamics AX Can Help
Microsoft Dynamics AX is an enterprise resource management system for process, discrete and mixed mode manufacturers that includes business analysis, an enterprise portal, supply chain management, customer response management, human resource management and financial management modules; runs on a Microsoft platform; and uses technology already familiar to most of today's business employees.
To help address regulatory and environmental issues, Dynamics AX includes built-in functionality to help meet quality, safety and compliance requirements; exceptions management; integrated quality control capabilities and validation; batch attributes, inheritance and disposition; and centralized quality control and regulatory support.
For more details, download our white paper, The Top Challenges Facing Manufacturers in Construction-driven Markets & How to Meet Them Head On
Read other blogs in this series:
Look for our next blog, Challenge #4, Emerging Competition, Including Low-cost Offshore Labor & Alternative Products