Staying Ahead of Conflict Minerals [White Paper Preview]

This past month my firm published a new white paper regarding the impending Dodd-Frank Act and the impact on conflict minerals on the manufacturing supply chain. Particularly for electronics manufacturers and suppliers, the reporting issues are ambiguous and the requirements are defined by legislation but appear to be poorly written when it comes to execution.  As my colleague Liz Garnand explains in the paper, there exists a wide chasm between the “what” and the “how” of the new US legislation.

Various industry organizations are tracking and updating their respective manufacturers on Conflict Minerals legislative issues (e.g. EICC – Electronic Industry Citizenship Coalition, Global e-Sustainability Initiative (GeSI), AIAG – Automotive Industry Action Group, Mema – Motor & Equipment Manufacturer’s Association). Although these types of associations are knowledgeable sources of information for what will be required for reporting, their role is not focused on the “how to get it done”.

This question on “how” a company can systematically report and track Conflict Minerals is a challenge, especially for industries such as Electronics and Automotive.

Finding out a mineral’s origin right to the smelters and mining region is both a workflow and reporting process, and outside the core capabilities of IMDS. The core capabilities of systems that support PLM (Product Lifecycle Management) or SCM (Supply Chain Management) areas tend to be much broader and may not efficiently complete all the workflow and reporting required to ease the implementation around environmental compliance. Without an automated IT and workflow process for compliance concerns like Conflict Minerals, much follow up and requests to suppliers are then limited to emails, letters, and requests for information, all being quite tedious and manual, and prone to error.

You may read the full white paper on the Newport Consulting Group website, which also discusses one possible approach based on our recent client work which can take the myriad of conflict minerals actions into consideration.  Given the gravity of the pending act, manufacturers working with these minerals should plan now in the event legislation is implemented according to schedule or even in the best possible scenario that the implementation period is extended.

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Filed under Audit and Oversight, Compliance, Global Trade, Operations, Procurement, Risk Management, Supply Chain Management, Sustainability

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