The simple answer is that the building products are not managed along the supply chain; and fraud, commonly known as Economically Motivated Adulteration (EMA), is most likely occurring. After passing initial tests and certification the product is being replaced in the shipments with an inferior version.

How can this happen?

The management and suitability of the current standards for building products are addressed and adequate paths exist for these to be modified by the stakeholders — building industry bodies, regulators, standards bodies, manufacturers and end users — in Australia the AS/NZS standards; Europe the EN standard and in the Americas ASTM are well established. The enforcement of the standards and data collection across the supply chain, however, is not managed well and where registers are kept of certification they are isolated and difficult for consumers to find and use.

Supply chains today are not linear and require central management for effective compliance. The total supply chain needs to have the critical control points identified and checking regimes in place.  This would ensure data accumulation and easy identification of changes between the certified and shipped product. This requires a centralised data repository as close to real time as possible.

Attempting to manage and isolate non-conforming product only at the point of sale (POS) is inadequate, as product may have already entered the market. Not only does this mean that inferior product could already be in use; the economic risk for the importer or exporter is increased by not reviewing the product at lower value points in the supply chain. The sheer number of products and the lack of a single database to be able to check batches / shipments leave the process and subsequent product open to Economically Motivated Adulteration (EMA) where substitution occurs either in the manufacturing process or in the supply chain.  The product verification can be further inhibited by fraudulent documentation.

In addition to deliberate substitution, there are manufacturers that do not maintain manufacturing practices after certification which leads to non-conforming product being released until the next audit. This raises questions around the frequency of audits, whether audits should be unannounced and what other sampling needs to be completed. When a product is found to be non-conforming, the recall management processes are inadequate and confusing to the consumer.  The recall system needs to be robust and rely on the traceability / tracking of the products through the supply chain.

The failure to address these issues may lead to an increase in health and safety risks to workers and the public as well as significant economic impact. We have already seen this with the Lacrosse building fire in Melbourne, Australia and the disastrous Grenfell Tower building fire in the UK which resulted in such a tragic loss of life. There is no doubt from either of the previous mentioned incidents that inferior low-fire-resistant building cladding was used.  This has been identified by a number of experts including the fire brigades.

The question remains, how do you fix this?

It becomes a question of cost to conduct additional testing and the inherent cost of supply chain governance versus the retail cost of the building products. The answer for me is simple when we are becoming a society of multistory-building dwellers — there is no place for the real and proven risk to life from inferior materials.

These recommendations are simple and effective:

  1. A real time auditing platform with a centralised product database must be implemented to
    1. Manage the registration of manufacturers, importers and distributors
    2. Conduct criteria based assessments for benchmarking
    3. Compare product certifications and test results along the supply chain
  2. Manage suppliers for non-conformity and recalls
    1. Manufacturers, importers and distributors must be registered in a central data base and certified before being able to supply product.
    2. Identify and draw upon existing effective conformance models currently used within the Automotive and Aerospace Industries.
  3. 3rd-party certifiers must place their product certifications into a global centralised database so that all consumers can find if a producer is certified and current.
  4. Critical control points must be established from the supply chain at which sampling or assessment takes place.
    1. Manufacturing location assessments — Unannounced audits and increased frequency of audits for previous non-compliances
    2. Regulatory enforcement takes place in the import country
    3. Export manufacturers would be regulated by a commercial contract between the local country importers or distributors
    4. As an example, the Exporter Supply Chain Assurance System (ESCAS) live animal model in Australia maintains compliance through commercial contracts
    5. Inspections move to being criteria based on a Mobile Auditing Platform to give as close to real time results as possible.
  5. The centralised data base must be self-funding by the user. Economic benefits to the suppliers result from finding non-conforming product earlier in the supply chain, preferably prior to shipment from the manufacturing point.

As outlined these will lower economic risk, prevent failed product release and more importantly prevent them from being used in buildings exposing people to risk.

About the Author: John Moushall has spent the last 30 years in manufacturing and professional service environments involving producing consumer goods, pharmaceuticals and food. In particular, John has spent the last 9 years as General Manager in charge of the Asian Region for SAI Global — managing the audit business for processes and product certification.

Image: Grenfell Tower fire, 4:43 a.m. | Natalie Oxford (CC BY 4.0)

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