Rules and regulations play a big role in maintaining safety and security for businesses, particularly in supply chain and manufacturing. This is where supply chain compliance becomes essential, helping businesses meet legal, ethical, and industry standards while ensuring a safe and trustworthy process from start to finish.
In this article, we’ll look at what supply chain compliance is, its main components, and the top four practices to help maintain compliance for any industry.
What Is Supply Chain Compliance?
Supply chain compliance is the process of ensuring that a company and its partners follow relevant laws, industry standards, and ethical guidelines throughout every step of the supply chain. This means that from sourcing raw materials to delivering finished goods to customers, every action aligns with legal and ethical requirements.
Maintaining supply chain compliance is key to protecting the company’s reputation, reducing risks, and upholding integrity. Here are some main areas that make up supply chain compliance:
- Labor Standards: Ensuring that all partners and suppliers follow labor laws, such as fair wages, reasonable work hours, safe working environments, and a strict policy against child or forced labor.
- Ethical Sourcing: Confirming that all materials and components are sourced responsibly, without contributing to illegal activities, environmental damage, or social injustices.
- Environmental Regulations: Meeting environmental laws and regulations, such as waste control, emissions management, and eco-friendly practices across the supply chain.
- Product Safety and Quality: Making sure that all products meet safety standards and quality guidelines, as well as being handled according to relevant laws.
- Data Protection and Privacy: Complying with data protection laws to ensure customer and employee data is secure and used responsibly.
- International Trade Regulations: Adhering to trade laws, including customs duties, trade restrictions, and export controls, when dealing with imports and exports.
- Anti-Corruption Policies: Setting strict guidelines to prevent corruption and bribery across the supply chain, and complying with anti-corruption laws.
- Conflict Minerals Compliance: Ensuring that minerals from conflict regions are not used, following regulations such as the Dodd-Frank Act.
- Social Responsibility: Taking steps to support the well-being of local communities and stakeholders affected by the supply chain.
- Supplier Audits and Monitoring: Regularly auditing suppliers to make sure they’re compliant and meet the standards, identifying areas for improvement as necessary.
Keeping supply chain compliance on track involves working closely with suppliers, vendors, and partners. Many companies establish codes of conduct, supplier agreements, and verification processes to monitor compliance. In addition, certifications like ISO 9001 for quality management and ISO 14001 for environmental management show commitment to maintaining a sustainable and compliant supply chain.
4 Best Practices for Maintaining Supply Chain Compliance
While different industries have unique needs — for instance, food manufacturers focus on temperature control for safety, while military equipment makers emphasize security clearances — every business can benefit from understanding its supply chain more deeply. Knowing where products and materials come from, and the journey they take, improves operations and supports stronger profit margins.
Here are four best practices for maintaining supply chain compliance that apply across industries:
1. Carefully Evaluate and Onboard New Suppliers
A large part of supply chain compliance is ensuring that your suppliers are following the law and operating ethically. Before entering a partnership, it’s essential to collect evidence that suppliers meet legal, ethical, and safety standards.
Onboarding a new supplier is similar to hiring a new employee. Research is critical, and it helps to create a set process for vetting and training suppliers to align with your standards. You might require new suppliers to sign agreements that acknowledge your company values and agree to operate within those values.
Additionally, using third-party services can help assess compliance risks for prospective suppliers. Adding this step to your onboarding process provides extra security and peace of mind.
2. Store Supplier Data in a Centralized, Visual Format
Organizing supplier data in a single, secure place makes it easier to manage all updated information, including insurance documents, safety records, and certifications. Ideally, this data is accessible to relevant departments and organized so that it’s easy to review and update.
Some supply chain software programs centralize and display this information through dashboards that show supplier details visually. These programs allow you to sort suppliers by factors like inventory levels or invoice status, making it easier to track compliance and re-evaluate suppliers regularly for updated certifications and other compliance factors.
You can even set alerts for certifications nearing expiration. Centralizing this data keeps it manageable and ensures that everyone who needs access to it can easily find it.
3. Improve Product Tracking and Labeling Systems
Keeping track of supplier certifications is vital, but tracking each product individually can provide even more control. Many industries, including electronics, food and beverage, and pharmaceuticals, have adopted sophisticated tracking systems that make it easier to trace products along the supply chain.
Typically, a unique serial number or alphanumeric code is assigned to each product and displayed as a barcode on the product label. In some cases, companies are using blockchain technology or DNA tagging to trace products with even greater precision.
Having detailed tracking information for each product makes it easier to locate and isolate items if a recall becomes necessary. Product tracking also helps with quality control by making it simple to verify the authenticity of a product and identify counterfeit items.
As the company Loftware explains in its report on Supply Chain Management, tracking means following a product’s movement from one point to another, while tracing involves identifying the product’s origin, including the materials used in its production. Businesses that embrace both tracking and tracing gain an advantage, improving both compliance and customer trust.
4. Track Visitor Information at Your Facilities
A strong supply chain compliance system includes keeping records of people who have access to products, especially if these products are in sensitive or regulated industries. Limiting access to essential personnel minimizes risks and maximizes security.
Some industries require detailed visitor tracking. For instance, companies that wish to join the Customs-Trade Partnership Against Terrorism (C-TPAT) need to track who enters and leaves their facilities. International standards organizations and government bodies may also require companies to record visitor information as part of industry best practices.
Visitor tracking has additional benefits, like helping you determine how many staff members you need to manage visitors and identifying reasons for visits. Just be sure to handle visitor data responsibly and respect personal privacy.
Final Thoughts
Supply chain compliance is crucial for businesses across industries. By evaluating new suppliers, organizing supplier data centrally, implementing robust product tracking systems, and managing facility access, businesses can build a resilient, trustworthy supply chain. Companies that prioritize compliance not only protect themselves legally but also build stronger relationships with customers and partners by showing their commitment to high standards and ethical practices.
If you’re looking for an efficient way to track visitor details, you might consider a visitor management tool like The Receptionist for iPad. This system is a valuable asset for manufacturers, logistics companies, and warehouses, helping them maintain compliance while streamlining visitor management.