The Factored Quality Guide to Compliance

The Factored Quality Guide to Compliance

In Part 10, we unpack the ins and outs of compliance for brands producing consumer goods.

Any consumer brand knows the challenge of navigating quality control, from product development to warehouse inventory audits.

Fortunately, at Factored Quality, we’re experts on all aspects of audits — so founders and startup operations teams don’t have to worry about the details. And we’re going to outline all of them in this series.

In Part 10 we unpack the ins and outs of compliance for brands producing consumer goods.

Let’s dive in.

Compliance is a key component of QC 

In the realm of consumer goods, compliance encompasses meeting and adhering to myriad laws, regulations, industry standards, and ethical guidelines. From product testing and safety labeling to environmental impact, these requirements affect every facet of production, marketing, and distribution.

Compliance ensures the quality of manufacturing and production for brands and products, including:

  1. Protecting consumer safety by meeting safety standards and reducing the risk of causing harm to customers.
  2. Boosting brand reputation by meeting or exceeding compliance requirements and building trust with consumers.
  3. Gaining a competitive advantage to differentiate your brand from the rest of the market.
  4. Avoiding legal consequences from non-compliance, such as fines, recalls, and lawsuits.

How non-compliance impacts a business's bottom line

Conversely, non-compliance can result in severe repercussions, ranging from fines or lawsuits to product recalls and boycotts. These penalties are not only financial burdens but also tarnish a brand's image.

For example, when the Joy/JM-branded My Little Steamer® and My Little Steamer® Go Mini handheld clothing steamers presented a severe burn hazard due to expelling hot water during use, public recalls followed. About 5.4 million units were affected, with 227 incidents, including 106 burn injuries, with eight second-degree burns and six third-degree burns.

In addition to the recall, the U.S. Consumer Product Safety Commission (CPSC) announced a $16 million civil penalty to HSN Inc. in November 2023. The CPSC said HSN failed to report a known defect that could “create a substantial product hazard or created an unreasonable risk of serious injury to consumers.” 

The settlement requires HSN to:

  • Enhance its compliance program
  • Maintain internal controls and procedures that comply with the Consumer Product Safety Act
  • Submit annual reports of its compliance program for three years

The damage to the HSN brand could have been prevented with better regulatory compliance procedures so they could appropriately respond to reports of injury risk. Instead, they took on an eight-figure penalty and suffered immeasurable damage to customer trust.

How to ensure product compliance

Specific compliance practices depend on where you are in the manufacturing process. It’s often much more cost-effective to design a compliant product from scratch than fix one that isn’t. But not every company has the capital to abandon an entire product inventory and update the design.

To bolster compliance efforts at every stage of the supply chain — even for existing products — brands need these five strategic components:

  1. A compliance assessment to understand your current status and identify any regulations for your product or industry.
  2. A gap analysis to spot where your practices fall short of meeting regulatory requirements or industry standards.
  3. A risk assessment to evaluate the impact of each gap and create an action plan based on what needs to be tested, timelines for testing, and resources required.
  4. Implementation of the plan and reviewing the results.
  5. Monitoring and reporting with annual tests or updates based on new regulatory changes.

This process will allow a brand to prioritize compliance concerns on current products and ensure protection from future defects. For consumer goods brands that want to build deeper trust with consumers, they’ll need a convenient place to manage compliance efforts and a support network of inspectors, auditors, and labs to lean on.

That’s where Factored Quality comes into play.

Factored Quality adds industry expertise to your compliance efforts

Compliance isn’t just a legal requirement; it's an investment in your brand's safety, trust, and longevity. 

By partnering with FQ, brands benefit from the advantages of an all-in-one destination for QC, testing, and compliance. FQ understands that every product is unique. That means each brand needs a tailored service based on product-specific hurdles and the markets they serve.

To meet our brands’ needs, our team focuses on critical areas in the QC process:

  • Continuously monitoring regulations — so you can stay ahead of the latest changes
  • Bridging the gap between manufacturers, testing labs, and brands — so your products meet the highest quality standards with minimal delays
  • Reviewing results and recommendations — to meet safety standards and customer expectations

With Factored Quality as your guide, you gain a strategic ally to help meet regulatory standards and protect your reputation.

Complete a Compliance Gap Analysis for your brand or Book your personalized demo today.

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