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Automotive Industry Revs Up for 2015 Conflict Minerals Reporting Year

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Three early trends are taking shape as companies begin data collection efforts.

By Marc Church

With the 2014 conflict minerals reporting deadline having just passed in May, automotive companies are already getting underway with their 2015 reporting efforts. While some companies have already begun engaging suppliers, most companies will be starting their data collection efforts in the coming weeks. With that said, three early trends related to program maturation, data, and scope determination are starting to emerge.

The first trend highlights the maturation in company programs. For example, during the first two years of conflict minerals reporting, most companies spent a majority of their time setting up processes, asking themselves “how do I manage this program”, or “how do I ask suppliers for a survey”?  With their program processes now in place, companies are looking at how their activities throughout the year will impact their annual disclosures or/and customers disclosures. The result is more attention on the actual data received and not just the data collection process itself.

This attention on data has resulted in the second trend, which is the growing shift from data quantity to data quality. Even as companies continue to push for more data from their suppliers, they are starting to ask themselves a key question: “how do I know what I received from my supply chain is good enough”? The result is that companies are now performing more Reasonable Country of Origin Inquiry (RCOI) analysis and smelter validation. These efforts, combined with those of the Conflict Free Smelter Initiative (CFSI) are leading to better smelter data, namely a reduction in the number of unknown and non-validated smelters.  These RCOI efforts along with better smelter information is a general improvement in the quality of data across the entire automotive supply chain.

The third emerging trend is the general shift companies are taking to request some data at the part-level rather than just the company-level. However, the supply chain’s willingness to provide more detailed data in response is trending at a slower rate. One argument would allow that requesting data from suppliers at this level makes it easier, since the supplier would technically only need to collect data for the parts they supply to the requestor. However, collecting data at the part level can also result in higher data collection efforts and more sophisticated data management systems. As such, many companies have adopted a “hybrid” approach, in which part-level data is requested when appropriate, such as when a limited part set is needed, rather than an entire company-level declaration.

So, as the automotive industry prepares to launch its data collection effort for the 2015 reporting year, understanding these trends and how they will impact your own program will be beneficial. Moreover, as the need for supply chain transparency and material traceability increases in the years to come, the ability to efficiently collect, analyze and report material compliance data will only increase. Conflict minerals reporting is a part of that growing development, and having the proper program and systems in place is critical for success.

Marc Church is president, U.S. Sales and Operations, at iPoint, Inc.

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