Supply chain compliance is becoming one of the biggest challenges faced by all retail professionals. Among small, medium enterprises’s it likely hits a little harder, with limited resources and where costs are always a make or break factor. Often-times you can only afford a supplier lacking certain levels compliance documentation, which in turn requires you to monitor them even more stringently, but can you afford the resources to do so properly? Your supply chain is dotted with complexities that can expose your organization to risk. This risk as you know needs to be avoided and planned for with actionable steps in place to mitigate any kind of exposure or threat to your supply chains operations.
So let’s do just that…
In this blog post, I endeavor to highlight only two of the most common supply chain challenges that many regional retailers currently face, but also what you can do to begin achieving that desired supply chain compliance for your brand so that you may begin safeguarding against avoidable areas of risk. So let’s dive in;
Identifying the challenges that you face within your retail supply chain is always the best place to begin, here I list two of the most common challenges that are experienced among many a local retailer;
1. Supplier relationships – Your suppliers are the key to your entire operation.
Take a moment consider that…
Supplier collaboration can foster growth, if allowed they can also help you to create operational efficiencies which enables you to get your product to market a lot faster.
This relationship will act as an incubator for out of the box, innovative thinking as your supplier begins to take real ownership of the end products and their quality. The way in which you engage with your suppliers from the very beginning, will set the tone for your operations going forward.
Careful assessment is needed when signing on new suppliers, this is often the point at which compliance problems begin to seep in. You need to ensure that all the appropriate factory technical documentation is in order when selecting a supplier. A bit of due diligence in this area will guard you in the long-run. This will ensure that you have a defined and agreed upon set of operating principles where everything is done in compliance with these operating principles and standards.
2. CSR and environmental impact – Through adequate evaluation and a good a supplier relationship you will be able to determine CSR and environmental impacts. This is either done through a social compliance audit and an environmental audit which is either done in-house or through a third-party quality provider, such as API.
An environmental audit will provide insight into things like by-product waste of the factory, how they dispose their waste, who disposes their waste and what levels of CO2 are being emitted and whether or not any of this can be reduced or are even being addressed. The results will help you to determine their impact on the environment and whether or not they are compliant with local and/or international environmental laws.
A social compliance audit provides insight into things like child and forced labour, overtime and possible wage related disputes. This things are not only unethical, but should your brand be aligned with these practices, you will be destroying your brands reputation and image.
The results of the above audits will enable you to make an informed decision about the type of supplier you wish to align your brand with.
Let’s take a look at what Walmart did; They created what they call the Sustainability Index, which is essentially a scorecard for suppliers to be reported on from various social and environmental production factors.
Walmart has said that by the end of 2017 that 70% of its products will come from suppliers who participate through this Index, and as a benefits they will be endorsed as a sustainable partner and proud Walmart supplier.
Supply chain compliance is an important issue to address, with many local retail brands realising that compliance needs to be a top priority to be achieved in order to achieve a globally competitive advantage in the market.
So how do we go about achieving just that?
1. Supply chain visibility – This refers to the data visibility made available within your supply chain; from where your raw materials come from, to your factory’s technical operations right through to your inventory management strategies.
All of this data needs to be made available and visible to your consumers to create a sesnse of openness and trust within your supply chain operations.
**When bringing on new suppliers be sure to ask for access to all of their compliance documentation from health and safety, to environmental and technical information.
2. Supply chain transparency – This is where your organisation begins to analyse current quality and compliance procedures. Transparency and visibility need to work hand-in-hand the data provides insight into the operations and the operations provide the data to be analysed.
Supply chain transparency endeavours to take a deeper look into your systems and processes, understanding what makes them work and also not work. This approach to your supply chain operations allows you to mitigate risk early on, but also identify any areas that may need improvement, therefor adopting a continuous quality improvement cycle.
As mentioned earlier, consumers actively research any retail brand’s supply chain and its processes from raw material to the moment a product reaches the floor to right before they make that purchase decision. It is crucial for your brand to ensure clean and compliant operational procedures if you are to achieve a globally competitive brand.
Supply chain compliance need not be another complexity that your retail brand needs to face, through actively engaging and applying the above suggestions to your operations they will indeed help you on your way to a successful and compliant supply chain that puts your brand in a position of growth and also mitigates against any unnecessary risks.