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In December 2022, 3M, one of the world’s largest manufacturers, announced it would end the manufacturing and use of per- and polyfluoroalkyl substances (PFAS). 3M sells over 60,000 products to industries such as automotive, construction, electronics, energy, healthcare, manufacturing, and transportation, so the decision to end its manufacturing and use of PFAS affects thousands of companies through many levels of the supply chain, all the way to end users who rely on the properties that PFAS provide.
The major manufacturer isn’t the only company to remove PFAS from its supply chain. Others are following suit due to numerous factors like increasing regulations, litigation, customer and investor pressure, and overall concern about the environmental and health impacts of PFAS. As such, parts obsolescence will become a major concern for manufacturers. Preparing for this issue now by understanding where PFAS may exist in your products and processes will help you manage supply chain disruptions.
Why Are Suppliers Removing PFAS From Their Supply Chains?
PFAS’ tight chemical bonds mean they don’t break down over time. They’ve been dubbed “forever chemicals” because they resist degradation and can build up in the body. Research has shown PFAS usage can have negative effects on the environment and human health.
Regulators have started to take action on PFAS, and are beginning to restrict their use more and more. In 2023, manufacturers can expect new regulations from multiple levels of government, such as the reporting and restriction law in the state of Maine, An Act To Stop Perfluoroalkyl and Polyfluoroalkyl Substances Pollution, which went into effect on January 1, 2023. This law requires manufacturers to report PFAS products with intentionally-added PFAS and prohibits the sale of certain products with intentionally-added PFAS. The prohibition will eventually extend to all products by 2030 unless the Maine Department of Environmental Protection determines the use of PFAS to be a “currently unavoidable use.” Several other states are now proposing similar types of regulations.
The public is also becoming more aware of PFAS and their negative effects on human health and the environment. Lawsuits alleging PFAS contamination are becoming more common — both against the manufacturers of the chemicals and downstream companies that use the chemicals in their products or processes. There is also a rapidly-growing trend of class action lawsuits for fraudulent claims against companies that market their products as “safe,” “healthy,” “all-natural,” or “sustainable,” and yet the products contain PFAS.
Here are examples of prominent lawsuits regarding PFAS contamination or false marketing statements:
- The state of California: Attorney General Rob Bonta filed a lawsuit against major manufacturers, including 3M and DuPont, for endangering human health and causing irreparable harm to natural resources.
- 3M: The manufacturer settled a lawsuit in 2018 for $850 million USD for polluting groundwater in Minnesota.
- DuPont, Chemours, and Corteva: The chemical companies reached a $4 billion USD settlement in 2021 over PFAS contamination claims
- 3M Belgium: In 2022, the manufacturer settled a €571 million lawsuit to remediate PFAS contamination in Flanders.
- Thinx: Settled for up to $5 million USD after testing revealed the presence of short-chain PFAS in its products, despite claims of being a safe and sustainable choice.
- Kraft Heinz: Subject of a lawsuit for deceptive marketing practices because there’s PFAS in its reputedly “all-natural” Capri Sun Strawberry Kiwi juice.
- Coca-Cola: Being sued for calling its Simply Tropical fruit juice natural, despite levels of PFAS hundreds of times above the federal advisory limits for drinking water.
Insurance companies have begun paying attention to PFAS, too. They don’t want the risk of paying for lawsuits or cleanup costs from decades of contamination. Insurers will set stricter rules about PFAS in supply chains when insuring manufacturers, which creates an added burden for these businesses.
Additionally, a coalition of major investors has put pressure on manufacturers to remove PFAS from the supply chain. In November 2022, a group of 47 asset managers with $8 trillion USD under management called upon manufacturers to phase out PFAS use.
All of these pressures have led suppliers like 3M to begin removing PFAS from their supply chains. Their decision affects manufacturers, because they may now face early part obsolescence.
What Does Part Obsolescence Mean for Manufacturers?
As suppliers phase PFAS out of the supply chain, manufacturers will have difficulty finding the parts they need to create their products.
Three things can happen: Manufacturers must compete for parts, they may have to redesign their products, or they may need to invest in new capital equipment. They’ll have to compete for parts because other manufacturers will also need to buy new PFAS-free parts. At first, few suppliers will be able to meet the demand for these parts, causing delays and supply chain disruption.
Parts obsolescence might also lead to product redesign. Redesigning a product is an expensive, costly process. Once a product is redesigned, it may have to go through requalification or recertification so national authorities allow it to be sold in their market (which also adds time and cost).
As PFAS are phased out of the supply chain, manufacturers’ operations may be impacted. Obtaining maintenance and repair parts for equipment, such as PFAS-embedded gaskets or seals, may become difficult or impossible, leading to last-time buys and eventually impacting the ability to keep equipment (and manufacturing lines) running. Additionally, where PFAS chemicals are essential to a process (e.g., a chrome plating operation), new chemicals may need to be identified which could lead to changes in processing equipment. Unplanned increases in capital expenses for new equipment may impact other operational strategies and activities.
How Assent Can Help
There are thousands of PFAS chemicals used globally, and it can be difficult to understand where they are in the supply chain. This makes regulatory compliance, or anticipating the other business drivers like early obsolescence risk, an overwhelming challenge.
Assent collects data from deep in the supply chain to identify PFAS risk and provides the visibility manufacturers need to demonstrate PFAS due diligence to customers, regulators, investors, and insurers.
To learn more about Assent’s supply chain sustainability management solution, get in touch, Contact us.
