Survive & Thrive
DABBLE A bit in the philosophical realm, the term “golden mean” is often applied in the discussion of ethics for the greater good of society. It is said to be the ideal middle ground between two extreme points of view and many of the world’s greatest thinkers—from Aristotle to Confucius—have touched upon it in their teachings.
Although the golden mean seems to be a fairly straightforward theory, in practice, it is often much more difficult to strike such a delicate balance. In our industry, no event proves this point more readily that the passing of the Consumer Product Safety Improvement Act (CPSIA). According to consumers, it is a much-needed, long-awaited reform. However, to some of the suppliers and manufacturers who must adhere to these new rules, middle ground has not yet been found.
The Great Divide
“I think what’s happening is you’re seeing the pendulum swing right now,” said Steven Soep, quality control supervisor at Gordon Industries, New Hyde Park, N.Y. “And, as with all new initiatives, the pendulum tends to swing to the high side and then it comes back down and finds some sort of equilibrium,” he added.
This is an optimistic hope for the set of laws that many in the industry have found to be unreasonable, at best. One of the main concerns is competing standards still exist, particularly California’s Proposition 65 which has, to this point, been the most stringent state regulation of lead and other contaminants in consumer products. “If [California] wants to see 70 ppm of lead and the national standard is 90, then we have to set our standard to Prop 65,” Soep explained. Products that exist in the gray area between 70 and 90 ppm seem to be out of luck.
Other concerns include the fact that the new laws also detail how suppliers must deal with inventory that had been in-stock prior to the passing of CPSIA, the expense of third-party testing and how to plan for a future that includes constantly changing requirements.
“The confusion and ambiguity in certain sections of the CPSIA must be resolved so that [the] industry and the public know what is expected,” noted David Nicholson, president of New Kensington, Pennsylvania-based Leed’s.
Early this year, the Consumer Product Safety Commission (CPSC) passed a stay of enforcement for certain requirements of the CPSIA, and another bill just recently went to Congress that will attempt to refine and amend CPSIA (see sidebar). However, even with these measures in place, suppliers and distributors must prepare themselves for some turbulence ahead. “It is going to be a process for any company, but for some it will be particularly difficult,” said Jonathan Isaacson, president of Gemline, Lawrence, Mass. He added: “Beyond the problem of defining what exactly ‘compliance’ means in a very vaguely defined law, companies [need] to have a strong process in place to be able to respond to the requirements.”
But it’s not all bad. Though it might require some front-end investment and a little more homework, contrary to some opinions, there are ways the industry can work within the system to maintain profit margins.
Invest in testing.
Soep noted that as part of Gordon Industries’ testing procedures, particularly for the company’s drinkware line—a category that, for any supplier, has been hit hard by both BPA and lead—every single product SKU is being sent out for third-party testing. Each test costs a couple thousand dollars per item, and must be done annually. “We’re also making an investment in technology that allows us to examine and test product as it comes in from our factories overseas,” he said, adding that there will be benchmark points throughout the testing process at which items will be examined to ensure “there’s no deviation between the approved and tested product.” Gemline has also invested in testing equipment both here in the U.S. as well as in Asia, Isaacson said.
What you can do: Understand that with all the testing and re-testing going on, there might be some unforeseen limitations in terms of product availability.
Check warehoused products.
“We … [had] procedures in place to ensure that all of our products met all federal standards before the CPSIA was enacted,” noted Larry Whitney, manager, trade compliance at Leed’s. Though the proactive effort from one of the industry’s largest suppliers can ease distributors’ fears, there was a modicum of confusion early on regarding warehoused products. Federal courts, said Soep, had to issue a ruling that existing inventory must also be tested, “because there’s the danger that you could have several hundred thousand pieces sitting in current inventory that are not compliant, but you’re going to say they are because the new production line of that item is,” he added.
What you can do: Ask to see testing reports for all products that have been in inventory for more than a year, as well as new items. According to Nicholson, “Many of our existing products in our warehouses have been tested for compliance to the new standards. This was prioritized based on products that fall under the CPSIA regulations.”
Get everyone educated.
The formation of the Quality Certification Alliance (QCA) has been generating buzz in our industry since its unveiling. “This organization can help distributors distinguish some of the companies making an effort to be ahead of the curve as it relates to these issues,” said Isaacson. What’s more, QCA (as well as other industry trade organizations) can help with the dissemination of information regarding CPSIA and forthcoming laws, which is half the battle. “I spend a good portion of every week explaining to distributors what some of the laws are,” said Soep. Though he does admit the jargon is intimidating, “You really have to take the time and read it and not just shuffle it away. The thing is to be able to read it and ask the questions,” he added.
What you can do: Sign up for alerts from the CPSC, said Whitney, and read literature from major testing laboratories. Also, make sure the information is passed down through to all levels of your company.
Spend a little more.
Price point can no longer be a deciding factor in our industry. With tighter specifications that may require the use of more expensive materials as well as increased costs for product screening and testing, suppliers are spending more than ever to remain compliant, Whitney maintained. And because items must be tested each year, it adds up. “I have some item that’s been in my catalog for three years running, by the time it’s the fourth year, I could spend six, seven, eight thousand dollars on it,” Soep said. Unfortunately, these costs must somehow be offset.
What you can do: Recognize the need for the industry to push forward in a responsible way. Work with your supplier partners to determine the most cost-effective steps to tailor a program to an end-user’s budget (particularly in this climate), and be aware that their investment in safety helps you, too.
Though the road is long and the challenges somewhat daunting, when all is said and done, “improving the public’s confidence around the safety and quality of promotional products can only be good for our business,” Nicholson said. “Ultimately, this is a critical issue for our industry to ensure promotional products remain a safe and trusted means of advertising.”
“I think what’s happening is you’re seeing the pendulum swing right now,” said Steven Soep, quality control supervisor at Gordon Industries, New Hyde Park, N.Y. “And, as with all new initiatives, the pendulum tends to swing to the high side and then it comes back down and finds some sort of equilibrium.”