Saturday, September 23, 2023

Must-Have Supply Chain Compliance Policies

By Nikhil Sonawane - May 29, 2023 5 Mins Read

Must-Have Supply Chain Compliance Policies

Today, the supply chain compliance landscape is more dynamic than ever. The stakeholder’s expectations are evolving tremendously, and global regulatory bodies are making their supply chain compliance laws more stringent, resulting in heavy fines for non-compliance.

Additionally, the delay in the market witnessed because of complex trade rules worldwide and multiple overlapping product integrity needs are a few complex challenges that business leaders need to address. Moreover, modern supply chains must meet environmental regulations to ensure a sustainable business model.

Enterprises must manage and track their supply chain compliance needs effectively and efficiently to ensure adherence. Business leaders do not only need the knowledge or access to data. They need to understand the influence of the current supply chain compliance requirements. Supply chain management leaders should also be able to evaluate the entire process to understand the horizon for the latest supply chain compliance trends.

What is Supply Chain Compliance?

Supply chain compliance means adherence of the organization to preset guidelines and requirements related to every risk or threat to the domain or supply chain continuity. This compliance adherence also means the organization can suffice or exceed the stakeholder’s expectations for procuring, producing, and delivering the products.

Supply chain leaders must comply with country-wide, state/provincial, and other local regulatory mandatory requirements and industry-wide standards. Moreover, the supply chain partners must adhere to bilateral and multilateral trade agreements and other Internal corporate policies established. Unique bottlenecks will exist while effectively managing supply chain compliance risk.

Such efforts include close collaboration between all functions within an organization and all participants, such as suppliers, distributors, brokers, and other intermediaries in the supply chain. Supply chain leaders must monitor and adhere to various requirements to prevent disruptions, potential regulatory scrutiny, and negative influence on the enterprise’s bottom line and brand image.

An efficient supply chain compliance strategy helps organizations with better control and visibility of their distribution chain, which results in smooth operations and product movements. In the current globally dispersed market, lack of transparency into tier 2+ suppliers, internal and external data correlations, Intricate interpretation of needs, and surge in unexpected supply chain risks create a challenging environment for supply chain leaders to ensure compliance.

Organizations must have strategic ways to gather accurate information about their supply chain compliance needs. They also need to have stringent ways to scrutinize the suppliers and leverage analytics to get additional insights on supplier’s financial viability, adherence to the contract compliance policies and other service level agreements (SLAs), and Third-party partnerships.

Also Read: Strategies to Mitigate Risks from Aging Organizational Assets

Ways to Develop an Efficient Supply Chain Compliance Strategy

Most organizations have digitally transformed or planning to digitize their entire operations to improve efficiency. Moreover, as businesses incorporate more third-party technology suppliers into the IT infrastructure, they must also integrate the best supplier compliance management tools to strengthen the overall compliance management programs.

There are various tools available in the market that helps organizations to improve compliance adherence. Organizations can integrate effective quality management systems (QMS) in their supply chain tech stack to document workflows, procedures, and responsibilities to meet all the quality and control objectives.

Furthermore, these tools also enable organizations to manage vendor relationships. Enterprises must concentrate on the most important business vendors to ensure supply chain continuity and protect the clients.

Preset Control Requirements in Service Level Agreements (SLAs)

Supply chain partners can contractually utilize Service level agreements (SLAs) that require the suppliers to align with all the security measures implemented. Enterprises can leverage SLAs to define the controls they expect to efficiently manage the vendor’s compliance based on the organization’s risk tolerance.

Business leaders can decide whether to continue or terminate vendor relationships based on these needs. For instance, enterprises might want to integrate data encryption at rest or in transit to secure data. It is crucial that the vendors also follow the same process and hold them accountable to meet compliance expectations.

Measure Key Performance Indicators (KPIs)

Enterprises should monitor the supplier information security controls by predefining the KPIs within SLAs.

For instance, supply chain leaders might want to embrace a baseline for restoring essential business operations while facing a service outage or downtime. Setting KPIs will help the supply chain leaders to evaluate the vendor’s resiliency, tracking, and incident response strategy.

Also Read: Top Strategies to Increase Employee Retention

Embrace Transparency Through Clear Communications

All supply chain leaders must embrace real-time communication with stakeholders to assign ownership of managing specific employee relationships in the organization. Migrating to a centralized digital portal will help to facilitate transparent and streamlined interactions and help to enhance supplier risk management.

Best Ways to Simplify Supplier Compliance

All supply chain businesses, regardless of size or type, find it challenging to adhere to compliance requirements. Keeping everybody on the same compliance page will be challenging as the organization scales. Business leaders need to ensure that they integrate a robust compliance management system (CSM) that demands the right tools and compliance software to simplify compliance activities.

Moreover, businesses must focus on developing digital supply chains that are a network of interconnected digital and technological enablers. Such technology and digital enablers streamline supply chain management (SCM) and enable organizations to respond effectively to and meet evolving customer demands. Supply chain leaders must automate the supply chain compliance adherence to save time, improve product quality, minimize costs, require less working capital, and increase productivity.

Traditional manual approaches to managing the supply chain will create siloes and not achieve the desired results. Organizations need to digitize their supply chain compliance processes to offer clients across multiple fulfillment channels more options, faster product delivery, and customized service.

Supply chain compliance in today’s age is challenging for various organizations because of evolving customer needs and compliance policies. Supply chain leaders must set the best strategies and tools to ensure adherence to compliance requirements.

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Nikhil Sonawane

Nikhil Sonawane is a Tech Journalist with OnDot Media. He has 4+ years of technical expertise in drafting content strategies for Blockchain, Supply Chain Management, Artificial Intelligence, and IoT. His Commitment to ongoing learning and improvement helps him to deliver thought-provoking insights and analysis on complex technologies and tools that are revolutionizing modern enterprises. He brings his eye for editorial detail and keen sense of language skills to every article he writes. If he is not working, he will be found on treks, walking in forests, or swimming in the ocean.

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