Want Higher Profits? Discover the Process Compliance Strategy
Discover why process compliance isn’t just a necessity—it’s your next big profit driver.
Every industry, every process, every product, development has some standard defined. You would rarely see something that is not backed by a standard.
We usually see adding compliance to increase the cost, that’s a fact. Equally, there is also a gain to be specific - financial gain in compliance. This article aims to show the benefits of compliance.
In some cases, non-compliance is mandatory, such as regulations. In this case it’s not optional, we will skip these mandatory cases. We will be focussing on compliance to internal process defined by an organisation.
Before delving into the economic analysis, it's imperative to establish a clear understanding of what compliance and non-compliance entail. Compliance encompasses a broad spectrum of activities aimed at ensuring that businesses operate within the bounds of frameworks. Non-compliance, on the other hand, refers to the failure to adhere to these requirements. This failure can result from oversight, negligence, intentional misconduct, or a lack of awareness of existing process.
Let’s take a case where we are trying to develop a hardware development of a product. Consider only one task - develop the PCB.
Example - PCB Layout
In order to fulfil this task, the designer shall bare minimum consider;
Customer/product requirements.
Physical constraints.
Product environmental considerations
Lessons learnt (previous products)
Field data monitoring
Regulatory requirements
We have to assume for each product development this shall be done. Else we fail at some sub-task, eventually the product fails.
The product must comply to requirements, environment and regulations. If not, we have a liability of failed product and the financial consequences coming out of it.
Where is compliance
Compliance comes when you define a process to each of this task. This is to ensure when the product gets developed, all aspects will get covered. We will take a couple of examples to understand how it all expands and interacts.
I. Product environmental considerations
The process shall define what the development and test inputs to be considered. E.g. while developing an automotive product -
Automotive temp range shall be considered.
The components all shall qualify for Automotive grade.
Apply the compliance as per market. For EU -UN ECE R10, for US its CISPR.
II. Field Data Monitoring
This is one of the most crucial aspects. If you are not in control, this single thing can turn your organisation into loss making. For each new product development, a bath tub curve is usually referred. New launches start with high failures defined as Infant Mortality and after some time failures are reduced and remain static. And finally Wear out failures occur.
As an organisation, you need to monitor the field returns. Quantify what caused the failure - was it the component failure, manufacturing process, supplier quality, design issue. The process shall define the steps to recover from these failures. The bathtub curve shows how it should be, but if you do not take action on your field returns, then you would remain in high failures always. This wall cost so much as part of warranty and other issues. Industry practice is to deploy 8D process for this.
Wiki - Eight disciplines problem solving
Process Compliance
A checklist is the easiest way to ensure compliance. Develop a checklist for PCB designer. The checklist will ensure if he has captured all the requirements. E.g. If regulatory requirements are not available, then you could reach to the customer and define those. Or if the temp range is defined but does not match automotive range, that’s another red flag.
Similarly, on the field data monitoring, a dedicated person can capture field data and generate the PPM for the organisation. He could also drive the issue through 8D so that it never gets repeated.
Compliance ensures the same issue will not get repeated ever.
When the issue does not repeat, the efficiency is improved and so are the profit margins. In current world scenario, the margins are under heavy pressure. It’s not an utmost priority to ensure the process is defined properly and runs smoothly.
Compliance fosters a culture of accountability, transparency, and integrity within organisations, which enhances trust among stakeholders and contributes to long-term business resilience. Moreover, compliance is increasingly recognized as a strategic differentiator in today's competitive landscape.
Organisations that prioritize compliance demonstrate their commitment to ethical business practices, sustainability, and corporate social responsibility, thereby attracting customers, investors, and top talent.
Embracing Compliance as an Investment
In conclusion, the evidence overwhelmingly supports the notion that compliance is not only cheaper but also essential for sustainable business success. While compliance entails upfront investments, the costs of non-compliance far outweigh these expenses, both in financial and reputational terms.
By investing in compliance, organisations not only mitigate risks but also unlock opportunities for growth, innovation, and competitive advantage. Compliance is not merely a regulatory obligation; it is an investment in the integrity, resilience, and longevity of businesses in an ever-evolving regulatory landscape.
Therefore, rather than viewing compliance as a burden, organisations should embrace it as a strategic imperative and a cornerstone of responsible business conduct. In doing so, they not only protect their bottom line but also uphold the trust and confidence of their stakeholders in an increasingly complex and interconnected world.
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