Case study: Creating an EUTR due diligence solution for the BHB

– Germany’s DIY, Construction and Garden Products Trade Association

The Challenge

In the years running up to the 2013 implementation of the EU Timber Regulation (EUTR) there was no go-to system for the timber industry to meet the new due diligence requirements. It was clear the EUTR would add a new administrative burden on companies in the timber industry but IT solutions at the time were inadequate, inflexible and expensive. The EU’s broad guidelines, that were designed to be flexible for a range of businesses and across twenty eight countries, meant companies were taking various approaches to their due diligence requirements. Suppliers then had to deal with different approaches and formats for each buyer.

The Co-operative Approach

In 2011 the BHB, through a joint environmental working group, sought a solution for EUTR due diligence compliance across all their wood product ranges, from sawn timber to garden furniture. The member companies themselves were competitive rivals but they didn’t see legality assurance as an area to compete. Since the whole market needed an effective supply chain data highway, the best way to build one was through co-operation.

The Solution

Global Traceability approached the BHB with a simple offer. Rather than working around an existing system, we’d develop the solution to match the requirements of the industry. The solution would be flexible – so companies can choose exactly how they use it, scaleable – allowing the user base to expand from 100s to 10,000s in months, and affordable – removing the cost barrier for businesses big and small. We launched the online platform RADIX Tree in 2013.

RADIX Tree represents a “substantial improvement for the DIY industry when complying with the regulations” Andreas Back, BHB and Hornbach.

At its simplest level, RADIX Tree enables the quick and secure collation of legality assurance information from the supply chain. Businesses simply add their suppliers to their network on RADIX Tree, who add their own information – such as the species of the timber raw material – that can be passed up the supply chain. Businesses can then use this information for their external due diligence system.

They also have the choice to manage their due diligence through RADIX Tree. With minimal setup, tools can be configured to reflect the company’s due diligence system requirements, verification rules can be customised to alert them of potential risk and due diligence questionnaires sent to suppliers can be adapted to include specific aspects such as internal product codes. Administration is streamlined and due diligence is demonstrated in the most cost effective manner.

The Future of EUTR Compliance

Today over 70,000 companies are represented on RADIX Tree, including large coverage of the European timber industry. With a ready network of users available it’s easier than ever to connect with suppliers on the platform. This benefits suppliers too, by meeting the requirements of one buyer on RADIX Tree they can replicate for others in their network without needing to go through a whole other system. The more businesses co-operate on a common platform, the more efficient the whole process of due diligence becomes.

Last year, Global Traceability partnered with the EUTR monitoring organisation NEPCon to provide the next step in due diligence solutions. Companies manage their EUTR information gathering using RADIX Tree while a dedicated NEPCon LegalSource advisor provides expert risk assessment and monitoring of that data. This service ensures companies have the best data and guidance to maintain a secure sustainable supply chain.