Understanding the Basic Background, Process Framework, and Basic Concepts

Producing and selling chemical products demands to take care of numerous regulations and provision of information or documents not only to customers but also to business partners along the supply chain.

Such compliance information supplements business data of products and goes even beyond the level of details of common business data - for example

• Breakdown of products and raw materials to the level of chemical substance
• For raw materials, inquiry on the level of supplier raw materials to grant compliance - not only for these raw materials but also as a prerequisite for compliant products.

Resulting compliance statuses are subject of compliance checks along the value chain.

This implies that compliance data for products must be tied to the business data and processing must be integrated in the value chain.

Looking at product compliance from a business perspective, we see, that compliance along the value chain is critical to protect brand value and company revenue.

Legal obligations commonly relate to producing or selling products and applicable regulations relate to affected countries/regions, which basically relate to business data like plants or distribution chains of products.

Availability and processing of compliance information are key for compliance along the value chain, which is achieved by

• Easy access to compliance information for products
• Compliance checks along with automated provision of compliance documents, integrated in the value chain
• Requests from logistic, addressed to product compliance roles
  • Created automatically, for example when a product is identified as being compliance relevant or in case of issues at processing of compliance checks
  • Created manually when compliance information for products is not available yet.

Looking at product compliance processes, we have the daily business and of course some tasks for administration of the underlying foundation, for example to manage regulations, according to business needs.

Processing requests from logistics is essential to integrate with the value chain. This provides an insight on new compliance relevant products, issues resulting from compliance checks or manually initiated requests for marketability assessments for a new country/region.

Providing basic compliance data is the initial process in product compliance. Basic compliance data is underlying compliance calculations and compliance assessments for all product compliance solution areas. For example:

• Composition information is published in safety data sheets and is essential for marketability and dangerous goods assessments.
• Physical-chemical or safety-related properties along with toxicological or ecotoxicological properties are underlying GHS classification or dangerous goods assessments.

Processing compliance assessments is the core process in product compliance. Assessments are processed in the three product compliance solution areas:

• Product marketability
• Dangerous goods
• Safety data sheets

You review the system embedded regulatory content and identify the compliance requirements, representing the regulations you must apply to your products and businesses.

For specific subjects, you might want to create company-own compliance requirements using the available compliance patterns. Be aware, that:

• not all compliance patterns are available to create your company-own compliance requirements;
• editing compliance requirements, which are provided with the system embedded regulatory content is restricted.

A newly created and released compliance requirement version must be activated. The first version only becomes available for assignment to compliance purposes when it is activated. A subsequent version only becomes available for assessments when it is activated.

A subsequent version only becomes available for assessments when it is activated. This applies similar for compliance requirements provided with the system embedded regulatory content.

The apply regulation functionality is only available for safety data sheet management and for dangerous goods. This is intended in case for a country/region regulations are not available in system embedded regulatory content and can be applied to existing compliance requirements for:

• Dangerous goods classification and documentation
• Safety data sheet management and shipment

To assign compliance requirements to products or raw materials, you need to assign them to a compliance purpose. This allows you to group compliance requirements for example by market areas or by business processes.

With the first 3 units, you get to know product compliance and understand the basic concepts of S/4HANA for product compliance. Unit 2 gives you a first look at the processes and terms to get prepared for diving into the following units.

In Unit 3, you learn to manage basic compliance data, which is the foundation for compliance assessments in the solution areas of product marketability, dangerous goods and safety data sheets.

Supplementing product master data with the compliance view, comprised of compliance assessments and the resulting compliance status; this constitutes the key concept for integration of product compliance with the value chain. Compliance requirements are the digitized representation of regulations or policies you assess to prove compliance and to achieve a resulting compliance status.

Since numerous regulations relate to substances which are the most detailed chemical level of products or raw materials, this breakdown is part of the basic compliance data, allocated to the compliance view.

You make use of basic functions to prepare the foundation for product compliance:

• You manage the regulatory foundation according to your business needs
• You start with basic compliance data for your products, raw materials, and the underlying inventory of company substances, which relate to regulation based listed substances

With this, you set the stage for

• Automated compliance calculations and further compliance assessments
• Integrated compliance checks to be processed for your products along the value chain.

With the automatically or manually created requests from logistics, you are always hands-on with business needs. In turn, business has easy-to-use access to compliance information for products. Besides integrated compliance checks, this is another aspect of integration into the value chain.

Functionalities to manage phrases or regulatory graphics, to create work views for a tailored view on data relevant for your every day's work, as well as migration objects to upload legacy data supplement the basic functions.

Company substances are the initial element to relate your products to regulations and to process compliance calculations.

Numerous regulations apply to substance lists, which can be lists of restricted substances or substances permitted to be used. Lists may provide limit values applicable on products containing certain substances.

You learn about the underlying substance concept, and your company substances relating to regulation based listed substances or listed substance groups.

Raw materials are the first level of product compliance, since compliant raw materials are a prerequisite for compliant products.

You approach compliance of raw materials basically from two ends:

Similar to the later products, you assess the chemical level, represented by the substances, which are constituents of the raw materials. The raw material analytical composition with underlying composition information of the supplier raw materials depict this chemical level.

Besides this, you retrieve compliance information from the suppliers of your raw materials. This is important, since you might not have a 100% insight on the substance level of your purchased raw materials.

The most valuable source for raw material compliance data are the safety data sheets, you receive from your suppliers.

The unpackaged product is the focal point of product compliance, since regulations for product compliance mainly relate to the chemical level, which is common for all derived packaged products. Similarly, the product's physical-chemical properties, or safety related properties, toxicological, or ecological properties are on the unpackaged product. Results of compliance assessments are, in general, valid for any assigned packaged products, except when there is a specific assessment on the packaged product.

When we put all this together, the unpackaged product carries all compliance relevant data from compositions, which allow to dive into the chemical level, across properties characterizing hazards to applicable compliance requirements with assessment results and finally reaching the assigned packaged products, which are sold to customers.

There are specific subjects, which require assessments on the packaged product. The most prominent example are dangerous goods regulations. Here the unpackaged product carries the basic dangerous goods classification, which is the initial point for any packaged product, since the used packaging must comply with packing instructions coming with the basic classification. But only the packaged product can carry the classification information, that you need to transport the product to customers.

The compliance assessments of the three solution areas are defined by the specific compliance patterns related to the underlying legal obligations. Assessment results are consumed for example by integrated compliance checks.

In product marketability many tasks are on checking substances being constituents of products against substance lists.

Then there are tasks to retrieve compliance of suppliers but also customers. Customer compliance is related to products with very specific risks. When you sell such products you must safeguard, your customers are eligible to handle these products.

You see, marketability assessments relate not only to products and substances contained therein but also to raw materials, suppliers of raw materials and even may reach out to customers purchasing your products.

You get to know the compliance patterns used in product marketability and the processes for compliance assessments along with the respective levels for assignment of compliance requirements, automated propagation of compliance requirements and compliance calculations.

Finally you will see how to consolidate assessment results in the market assessment for a country/region and for business processes Sell in or Produce in.

In the solution area dangerous goods, you strictly follow the two step classification process.

Starting with the basic classification of the unpackaged product, you get the applicable packing or tank instructions.

The packaged product must comply with these intermediate results, only then you can finalize the dangerous goods classification which you need to ship the product.

With the classification of the packaged product you get the complete dangerous goods description required to be output on transport documents. In addition you get the markings and labels you must apply on packagings along with placards to be applied on containers, vehicles, or tanks.

But there are also specific cases, in which you can make use of special provisions, which may allow you to transport your product without the full scope of obligations but only stating that a certain special provision is applied. This may ease transport, may shorten transport duration and finally may reduce transport costs.

The safety data sheet and hazard labels on products resulting from underlying classifications being the outcome of processes and assessments in the solution area safety data sheets may be commonly known.

Looking at safety data sheet management from a value chain perspective, there are quite complex integration requirements. You must ensure, your customer receives the safety data sheet latest with receiving the product. In case of substantial updates on the safety data sheet, resulting in a new major version of the document, you are obliged to subsequently ship the updated safety data sheet to customers, who received the products within the past 12 months - as defined for example in the applicable EU regulations.

The other part of safety data sheet processes is about assessments to gather information to be published on the safety data sheet. Here for some sections of the safety data sheet, you must apply regulation based assessments. For other sections, you can create company-own compliance requirements, for example when it comes to emergency measures with phrases adapted to your products and their applications or uses.