Accreditation: Adding Value to Supply Chains

June 9th 2019 marks World Accreditation Day (#WAD2019), a global initiative established by ILAC and IAF to promote the value of accreditation. This year’s theme focuses on HOW ACCREDITATION ADDS VALUE TO SUPPLY CHAINS.
The Chairs of both organisations have released a joint statement to introduce the importance of the theme and how accreditation can support government, regulators and businesses by providing widely accepted tools that help deliver value to supply chains.

The Role of Accreditation:
Accreditation determines the technical competence, integrity and impartiality of organizations providing conformity assessment services such as testing, calibration, certification, and inspection. Accreditation, underpinned by internationally agreed standards, adds value to supply chains as businesses seek to maximize value and satisfy contractual terms, while maintaining a level of confidence that products meet technical specifications and are safe to use. 80% of trade involves elements of testing, calibration, inspection and certification activities, collectively known as conformity assessment (Source: OECD). Accreditation is the independent evaluation of these conformity assessment bodies against recognized standards to ensure their impartiality, competence and consistency. Accreditation, therefore, plays an important role in reducing the costs of trade and doing business, enhancing technology transfer, and increasing investment. It also enables businesses to integrate into global supply chains, as they can demonstrate product quality through a common “technical language” needed to establish trust between business partners. (Source: The World Bank). A report, produced by the World Trade Organization Economic Research and Statistics Division, stated that the inappropriate use of conformity assessment accounts for 10% of Specific Trade Concerns (STCs). Accreditation provides an opportunity to address this issue.

What are the Issues:
– Although businesses have been producing items with goods sourced from around the world for many years, supply chains are now significantly more complex in terms of the speed, scale, depth, and breadth of global interactions;
– The global nature of supply chains and retail markets means that businesses have to operate in multiple and often differing regulatory environments;
– Determining the quality, authenticity and traceability of raw materials or components requires credible and trustworthy information;
– As innovation accelerates and the lifecycle of products shortens, markets become more unpredictable and exert increased pressure on supply chains;
– Businesses need to manage their exposure to risk or disruption from data security breaches or system failures;
– Effective selection of sustainable suppliers not just in terms of financial stability, but also Corporate Social Responsibility (CSR) performance and ethical practices. Product supply chains are increasingly globalized and complex as companies seek to optimize costs while retaining flexibility. Supply chains that stretch across multiple countries and sites pose major challenges in terms of quality, compliance with regulations and standards relating to safety, as well as environmental and social responsibility. Procurement is often responsible for up to 70% of companies’ expenditure (Source: The Chartered Institute of Procurement and Supply), and so any disruption could affect profitability, brand reputation and customer loyalty.

Increasing recognition
In recent years, there has been a growing trend towards greater recognition of accreditation and the acceptance of the arrangements by governments and regulators. For example, recent European Union (EU) trade agreements signed with Japan, Canada, Switzerland, and Tunisia cite the use of accredited conformity assessment to ensure harmonized free trade. The Gulf Cooperation Council (GCC) operates a single Market Regulatory System referencing accreditation as an essential tool for the implementation of the regulatory system and is used in all regulations to assure the competence of notified bodies. APEC (Asia-Pacific Economic Cooperation) endorses accreditation to underpin the conformity assessment component of the APEC agreements. ASEAN (Association of Southeast Asian Nations) has included accreditation in the ASEAN sectoral MRA for electrical and electronic equipment as a means of demonstrating the specified requirements are met. The mainstream acceptance of accreditation by both pan-regional bodies and domestic regulators within individual governments also helps WTO member governments to meet their responsibilities under the Technical Barriers to Trade Agreement and the Sanitary and Phyto-sanitary Measures Agreement. The use of accreditation is also recognised in other quarters. In the UK, the Institute of Directors recognises accredited certification to ISO 9001 as a measure in their annual Good Governance report, as does the Global Innovation Index, which rates economies on their performance. A recent report published by AIRMIC, the Association of Risk Managers, recognised the value of accreditation as a tool to price risk.

Accreditation Services: Adding Value to Supply Chains
Accreditation operates across all sector supply chains ranging from healthcare and medical devices, construction, energy, clothing and textiles, toys and electronics, IT and communications, to food safety and water supply. Accreditation offers a range of services that can add value and manage the potential risks in supply chains through the assessment of certification, inspection, testing, and calibration services. By demonstrating the competence, impartiality, and capability of these organizations, it underpins the credibility of goods and services, allowing procurement and supply chain managers to better manage their risks.
Accreditation provides a globally-recognized tool to not only assess and control risks of the internal operation of businesses, but also the products and services that they place on the market. In this way, Regulators, purchasers and employees can demonstrate confidence that accreditation delivers a safer world.

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