New Regulatory Requirements for Furniture Supply Chains

Gone are the days when furniture companies only had to worry about the use of prohibited wood in their supply chains - the US Lacey Act and the EU Timber Regulation. Today, a global suite of regulations require companies to track their raw materials sourcing much more closely: the EU's Deforestation Regulation (EUDR),Digital Product Passport (DPP) and the new US tariff regime, to name a few.

The new regulations call for strict accounting of the entire chain of custody for wood products (including intermediaries) down to the individual forests they were sourced from, whereas legacy timber regulations only required companies to declare species of wood used and their countries of origin. The EUDR requires companies to submit this information directly to a digital portal once the chain of custody has been verified as deforestation-free using satellite imagery or similar technology before any shipment can enter the EU. The EU Product Passport requires the origins to be disclosed to consumers via smartphone-readable QR code on the furniture itself. The US has announced an investigation into the furniture sector for possible tariff hikes, and US Customs and Border Protection continues to consider furniture ‘high-risk’ for possible detentions under the Section 307 Forced Labor bans.

What Makes Furniture Supply Chains Challenging to Map and Monitor

Furniture has unique challenges when it comes to supply chains: wood products have not traditionally been traced back to origin forests, even when certified by groups such as  FSC (Forestry Stewardship Council) and PEFC (Programme for the Endorsement of Forest Certification). Many wood products are harvested months or years before the material enters production so they have time to dry. Different species of wood may be substituted for the same use in a product, and products often contain multiple types of wood. A lot of plywood, oriented strandboard, and fiberboards are considered as being sourced from waste streams - byproducts of other supply chains - which are nearly impossible to trace to origin. 

How Furniture Companies Can Comply with New Supply Chain Regulations

The new supply chain regulations all have a common foundation: companies must maintain an up-to-date supply chain map for every product and shipment entering the EU or US, and that map must trace all wood (as well as cotton, aluminum, copper, and steel in the US and leather in the EU) down to the raw material origins. Sourcemap's supply chain mapping technology makes it possible to cascade requests for information from tier-1 to tier-2 suppliers all the way to tier-n forest managers, with expert support staff to assist suppliers every step of the way in their local languages and time zones. 

Once all stakeholders are mapped in the n-Tier supply chain, furniture companies can use their data to satisfy several regulations:

• EUDR: Collect GPS polygon maps of forests and screen them against a multitude of best-available satellite deforestation imagery maps to ensure zero-deforestation or degradation.

• EU DPP: Take advantage of the extended supplier network to begin collecting an audit trail to support  green claims including carbon, waste, water, and chemicals footprints; use of recycled materials; and substances of concern - all of which will need to be reported as part of the DPP.

• US Tariffs: Ensure you can demonstrate the origin countries for critical raw materials like steel and aluminum with rules-of-origin-based tariff exemptions and collect transaction records from suppliers to establish an audit trail.

• US Forced Labor: Trace any materials on the CBP's list of Product of Forced and Child Labor with enough chain-of-custody documentation to ensure that there is no circumvention or mixing with un-mapped products.

Ready to kick off a comprehensive supply chain compliance program to tackle all of these requirements and more? Get in touch with the business transformation team, solution architects and policy experts at Sourcemap.