How to Manage Compliance Risk in Your Supply Network

What makes compliance so difficult? One reason is that the rules are continually changing. But using AI-based tools makes managing compliance challenges a whole lot easier.

top 3 challenges for compliance officers

Simply stated, compliance is when you stick to specific rules that govern business operations, and follow principles of ethical conduct. If you break these rules, the fines can be steep, and penalties severe. Yet compliance and procurement officers often struggle to keep up with the growing “burden” of regulation in their enterprises and in their supply networks. Managing regulatory change has now become a top concern.

But there’s no need to fear compliance. Discover how to manage the risk more efficiently. Here, we offer solutions for four common challenges:

Challenge 1: Coping with complex regulatory requirements

Laws and regulations cover cybersecurity, environmental protection, finances, trade, product safety, labor conditions, and competitive practices, among others. Increasingly, as a manufacturer, you must make sure that your supply base follows the rules as well.

And when your business expands, so does your compliance risk. Whether launching products or entering foreign markets, each extra step means you have to comply with a further bundle of regulations. Add today’s emerging vulnerabilities from uncertain business conditions, and you see why compliance risk keeps growing.

ASK YOURSELF: HOW CAN I KEEP TRACK OF REGULATIONS AND COMPLIANCE THREATS IN MY SUPPLY BASE?

 

Solution: The riskmethods Solution TM retrieves risk data from commercial and government databases, and specialized risk data providers including IntegrityNext (supplier assessments) and European Compliance Company (ECC) & FORMAT (automated sanction-list checks). You receive:

  • Instant compliance risk evaluation of your business partners
  • Early warnings of image or compliance violations.

 

Equipped with such information, you save time, protect your business from negative publicity and improve your risk awareness.

Challenge 2: Getting a clear view of supplier compliance

Supplier assessment is a good framework, but you need more than “checking the box” on compliance requirements. Insufficient supplier evaluation, or rapid onboarding, can increase compliance risk in your supply network. You have to continually watch for violations in areas such as:

Business practices (worker exploitation, unfair trade practices, environmental damage)

Product quality (lack of cybersecurity, use of conflict minerals)

Third-party (violations by logistics providers, distribution partners)

And how well are you prepared for disruptions in these areas? What if a key supplier fails a quality audit or is ordered to stop production due to unsafe working conditions?

Visual with Impact Analyser for Category Chemical
ASK YOURSELF: DO I HAVE END-TO- END REAL-TIME MONITORING. HAVE I PREPARED MITIGATION PLANS?

Solution: Artificial intelligence automatically monitors your end-to-end supply chain to make sure compliance requirements are met. The riskmethods Solution gives you the transparency you need:

  • Ensure compliance in your supply network.
  • Learn about violations in real-time so you can act immediately
  • Understand the impact that violations have on your business
  • Begin effective mitigation thanks to built-in tools

What are the benefits? First of all, you save time and avoid costs. In the long run, you protect your reputation and contribute to a better world.

Challenge 3: Keeping up with regulatory change

Compliance officers say that keeping up with regulatory change is their top challenge, according to a 2020 survey by Thomson Reuters. The survey also showed that financial institutions received 56,624 regulatory update notices in one year. Other heavily regulated industries include automotive, aerospace and defense, chemicals, healthcare, and pharmaceuticals. To keep up, effective monitoring should include:

+ Laws / Regulations (such as GDPR for data protection)

+ Standards / Requirements (ISO, product ingredients)

+ Guidelines / Company Policies (WHO, supplier code of conduct)

+ Voluntary Agreements (Customs Trade Partnership Against Terrorism – protection of supply chains against terrorist infiltration)

Faced with continuous change, you need an effective way to verify ongoing compliance within your enterprise and your supply base.

ASK YOURSELF: HOW DO I STAY UP TO DATE, YET FILTER OUT THE NOISE?

Solution: Round out your risk data to get a 360° view of supply chain compliance risk. In addition to active real-time risk monitoring, The riskmethods Solution offers you flexible options and out-of-the box integration with specialized partners such as IntegrityNext.

You can:

  • Keep supplier risk profiles up to date
  • Add your own compliance assessment data
  • Incorporate automated self-assessments from suppliers
  • Integrate social media (sentiment) monitoring

This helps you set the right priorities and make the right decisions (for example, when onboarding new suppliers).

Challenge 4: Providing transparency for stakeholders

Stakeholders increasingly demand that companies be more transparent about their entire supply chain: how they source, manufacture, and deliver products, as well as their impact on the environment and society.

But tracking and reporting on compliance in your supply base manually is exceedingly time-consuming, if not impossible. Integrating compliance reporting into your technology-based risk management system makes processes more efficient.

Dashboard Compliance Risk and Summary
ASK YOURSELF: HOW CAN I MAKE MY COMPLIANCE REPORTING EASIER?

Solution: With The riskmethods Solution, you have all your supplier-related compliance data centrally available. Using dashboards and reports, you can:

  • Build custom stakeholder reports in seconds
  • Easily export reports to demonstrate that your sourcing and delivery of products meets compliance standards
  • Save time and cost by accelerating audits

Overall, such features enable you to meet customer requirements and be the supplier of choice. And of course, your job becomes much easier.

And managing compliance risk in your supply network is about more than avoiding penalties. It adds real value to your enterprise. Ensuring compliance verifies legality, maintains stability and integrity, builds trust and protects your reputation.

Managing Compliance Risk in Your Supply Network

Keeping up with regulations is a superhuman task. On top of that, you also have to monitor your suppliesr for their compliance. Ready to simplify things? Learn how in our whitepaper:
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