Automotive Compliance Growing Even More Complex

There’s no shortage of debate over increasingly complex regulations in the automotive industry. But one thing is certain, growing costs and impacts of managing risk, governance, and compliance are significantly changing the day-to-day operations of automotive manufacturers, dealers, and their supply chains. Forecasting supply and demand, predicting regulations for EVs, self-driving vehicles, and protecting customer data are just a few of the mounting challenges requiring companies to be aware and nimble to maintain compliance.

With that in mind, navigating and accurately forecasting as much as five years down the product cycle is paramount. And reliable data continues to be at the center of today’s good business decisions.

At Kaizen, we enable companies to rapidly adapt their businesses to meet changing regulations around the world. Whether affecting customer data/PII (regulations like GDPR, PIP Law, and CCPA), emissions (EPA standards, E.U. policy on EVs), or manufacturing (Inflation Reduction Act, USMCA, updates to CAFE), etc., we deliver awareness, interpretation, process engineering, and end-to-end system design to ensure compliance.

At Kaizen, we monitor existing regulations and current legislation around the world (including EPA standards, Inflation Reduction Act, USMCA and updates to CAFE) to ensure companies remain aware of new legal requirements and can adapt their business initiatives accordingly. It is imperative that automotive companies rapidly understand how major changes in government policy affect their business, one recent example being how reporting requirements changed when USMCA replaced NAFTA. Our team of industry experts also monitors changing security regulations over new technologies that collect personally identifiable information (PII), like GDPR, CPR, and CCPA.

One of the major pitfalls we continue to see in the industry is underestimating the resources needed to answer these critical questions:

1. Process Engineering: can sustainable efficiencies be created?
2. Data Management: What data do I need and where is it? Who has access and authority over it?
3. Technology: How can technology ensure timely compliance and response?

Executives are all too often surprised by just how much time and budget is wasted getting these answers. The efficiencies come with experience and knowing which of the many available approaches will garner the best – and fastest - results.

Process Engineering:
For process engineering, it’s important to understand current state processes and design a to-be state package of processes. Far too many times, organizations react to compliance requirements and create temporary processes without thinking about sustainability of those processes. In the automotive industry, processes can span across multiple functional units such as R&D, Compliance, Purchasing, Production Control, Manufacturing, Logistics, and Finance. Using the right process engineering techniques, temporary processes can be created in a way to reuse for the sustainable long-term processes.

This involves understanding and interpreting the compliance requirement, performing gap analysis, creating the process and redesign, validating and verifying, and continuously improving.

Data Management:
How data is housed across the company’s departments (from finance, legal, R&D, and others), across international borders, and up and down their suppliers’ systems is a major factor that slows down data sourcing. Unlocking the right data found in disparate, enterprise software (often siloed or in mismatched formats) is a major complicating factor and the key to saving costs and time.

For Data Management and Governance, it’s important to know how to source the right data together, by bringing various team players together for data discovery. The automotive industry is faced with many regulations in terms of Data Governance itself, and understanding those requirements as it relates to compliance reporting is crucial. Accurate record keeping and creating auditable data processes will serve as the fundamental elements for success.

Technology:
Central to all of these methods is ensuring your technology is collaborative, a force-multiplier that not only derives reliable information but does so with the most ease of use and automated processes possible. And it must provide decision-makers with transparency across departments and at all levels to allow for fast changes and accurate strategy implementation.

Ensuring that reporting is accurate and optimally formatted to allow businesses to make better decisions is crucial. In order to ensure compliance across an organization, companies need visibility and reporting at every level of the organization to ensure fast and comprehensive decision making. Understanding actionable volume insights and supplier insights through end-to-end reporting and look back analysis is one way in which automotive companies can meet this requirement.

Streamlining these processes refocuses once-wasted time and effort on the more valuable tasks of analyzing data, looking for opportunities, and identifying liabilities.

Kaizen’s experts bring decades of automotive industry data and analytics experience, so we know where to look and how to automate processes that quickly deliver actionable and understandable data insights. Whether you need help designing systems to ensure compliance for privacy laws, fuel efficiency goals, financial reporting requirements, or any number of the complex rules that vary from state, national, and international regulators, Kaizen is ready to bring ultimate control and peace of mind to your compliance efforts.

These insights are provided for informational purposes only and do not constitute legal advice. If you have a legal question, you should consult with an attorney.