Distributors in high-stakes industries are accustomed to providing quality certifications, also referred to as certs, to assure customers of product safety and functionality. Expertise in quality assurance and inventory control, supported by specialized systems, underpins the ability of a distributor to sell products that require certifications. However, managing certs is frustrating because the traditional processes are prone to inconsistencies and exceptions, resulting in too much manual work and reliance on human judgment.
Today, leading distributors in the fastener and aerospace industries, like Century Fasteners, Birmingham Fasteners, WCL Company and SW Anderson are aggressively improving their cert processes, turning a historical problem into a competitive advantage by improving customer satisfaction, response time, increasing employee engagement and driving down order processing costs.
Distributors that make their customers’ lives as easy as possible are also adding more value to their customers and, in the process, reducing their risk of being replaced by rapidly expanding digital disruptors.
In this article series we will provide a deep dive into certs, covering what they are, why they are important and how they are created, exchanged and used by companies around the world. We will also describe the limitations of current practices, the opportunity for savvy distributors and the future of quality certifications.
What are Quality Certifications?
Quality certifications describe documents generated throughout the supply chain to demonstrate that products, processes or systems have been evaluated and meet buyer requirements. These certifications can include product specifications, engineering standards, quality measures, safety regulations and more.
Common types of certs include Certificates of Compliance (CofCs), Mill Test Reports (MTRs), Certified Mill Test Reports (CMTRs) and Certificates of Analysis (CoA). They can apply to specific products and organizations, confirming the presence of a quality management system or individual employees with specialized skills.
Why Are Certifications Important?
Certs are crucial as they demonstrate a higher standard of care, ensuring products meet buyer requirements. Non-conforming products can have life-threatening and financial consequences, prompting investigations that start with requesting certs and production records from all vendors in the supply chain. Carmen Vertullo, a fastener engineering, testing, and failure analysis expert with Carver Manufacturing & Engineering claims “the first indicator of whether or not the producer has good control of its process is how long I have to wait to get the certs.”
Certs are also typically contractual requirements. Given the challenges in managing certs, withholding payment for missing certs ensures their delivery. Cert requirements result from risk analyses conducted in a company’s risk management plan. Automotive and aerospace industries generally employ Failure Modes & Effects Analysis (FMEA) to identify design and manufacturing risks, while the medical device industry follows the international standard ISO 14971.
End-users require certs to manage other risks, too.
Operating Efficiency
In some cases, certs manage commercial risks, like the consequences of a component being manufactured with incorrect dimensions. This can disrupt production, cause downtime and jeopardize on-time delivery to an OEM customer, leading to severe financial consequences for a Tier-1 automotive assembly plant.
Requiring the original manufacturer and its distributor to provide a cert for the purchased component instills confidence that the assembly plant can consistently assemble cars, ensuring reliable product delivery to the OEM customer while also meeting production and quality targets.
Manufacturers are increasingly being required to provide Production Pre-Approval Process (PPAP) certifications, confirming both product conformity to requirements and adherence to the initially agreed manufacturing process.
Safety and Reliability
Certs also play an important role in ensuring the safety of manufactured goods. For example, if a manufacturer used the wrong material when casting an aircraft part, the mistake could result in hundreds of deaths.
This is why OEMs require a material test report (MTR) to accompany cast aerospace parts, as it gives the manufacturer confidence that they will meet the design requirements and ultimately be safe for passengers. Such a part would be accompanied by many other certs related to the process by which it was manufactured and its final inspection results.
Brand Reputation
Large brands are increasingly using certs to ensure compliance with sustainability and human rights policies. The reputational risk associated with purchasing products made with child or slave labor is significant. Initially adopted by consumer brands, this trend is now embraced by B2B brands, and Germany has made it a legal requirement, with Holland and the EU set to follow shortly.
What Industries Use Certifications?
Many industries use certs to ensure compliance and manage risk. The list includes:
- Aerospace
- Medical
- Construction
- Food
- Chemicals
- Electronics
- Automotive
- Energy
- Consumer products
- Military
- Materials
- And others
What is the Trend for Certifications?
As global trade becomes more complicated, particularly with respect to sustainability, sanctions and human rights, an OEM’s risk of reputational damage due to supplier-related problems is increasing. Further, as efficiencies in mature supply chains like automotive become more elusive, OEMs are not only requiring certs to confirm the end product, but they are also requiring suppliers to certify that an agreed manufacturing process was explicitly followed. As a result of these and other factors, the number of products requiring certs is increasing as are the different types of certs being requested.
“We see an increase in both the number of customers requiring quality certifications and the type of certifications they require.” – Sam Huller, Sr. Director Global Sales, Stanley Engineered Fasteners
Why are Certifications an Opportunity?
For distributors that are vulnerable to digitally disruptive competitors, expanding into markets that require certs is a way to add more value and create competitive advantage. Distribution Strategy Group’s Distributor Relative Value Matrix, or DRVM, is a tool designed to help distributors evaluate their vulnerability to digital disruptors based on two types of complexity: product and logistics.
Selling cert-required products demands expertise in quality assurance, documentation, product labeling and lot-based inventory control. These capabilities increase product and logistics complexity, requiring knowledgeable employees and building a strategic moat to protect against obsolescence and pure price-based competition.
Paul is a Co-founder of Aramid Technologies, the developer of SmartCert. SmartCert streamlines the exchange of critical documentation in global supply chains, taking the paper and the work out of paperwork so humans can do what they do best. With over 800 companies exchanging quality certs on the platform, SmartCert is the leading company in the field of Digital Quality Cert Management.
Paul experienced challenges with certs when he was the operations manager for a machining company servicing the aerospace, energy and medical industries. He is a Director of Greentech Environmental and Color Communications and was previously the CEO and Chairman of ABP Induction, a global manufacturer of high-powered electrical heating equipment.
Reach out at pdecker@smartcert.tech