In 2018, products featuring a sustainability claim on their packaging delivered $114 billion in sales. More customers are voting with their wallets for the more ethical option. That means business owners can no longer deny that supplier compliance matters.
But supplier compliance management can be a headache. For businesses with extensive supply chains, vetting every supplier or vendor you work with is a huge undertaking. And with supplier compliance requirements informed by local laws, it can be hard to stay informed about how to measure supplier compliance – never mind improve it.
So what is supplier compliance, and how can you guarantee it at every stage? Read on, and we'll tell you what it is, why it matters, and how to ensure vendor compliance throughout your supply chain.
Benefits of Supplier Compliance
All around the world, countries have introduced laws meant to end unethical behaviour in supply chains. If you want to do business in a particular country, you must ensure that your business meets and exceeds its laws for ethical compliance.
To ensure supplier compliance, you need to bring your business's supply chain into line with those standards. An ethically compliant supply chain will adhere to strict principles in the following areas:
- Child labour
- Forced labour, compulsory labour, and modern slavery
- Health and safety
- Environmental policy and practices
- Safe waste disposal and chemical handling
- Workplace discrimination
- Fair pay and working hours
- Management and discipline
- Freedom of association
There are plenty of great reasons to ensure supplier compliance. For one, customers want to support ethical business. A compliant supply chain will benefit your company's sales and marketing.
But it will also keep you out of legal difficulty in the future. Standards for compliance will become stricter over time, so it's in your company's interest to build an ethical supply chain today. That way, you can be as confident in your business's high ethical standards as you are in the quality of your work.
Three Strategies for Improving Supplier Compliance
If you're wondering how to improve supplier compliance, it's never been easier. With these three simple strategies, you can improve supplier and vendor compliance from the very beginning of your working relationship.
Confirm Capability and Suitability
In order to build a lasting relationship with a supplier, you need to be sure that they can provide the service you need.
If you rush into working with the first available partner – or the cheapest – you could get stuck in a working relationship that doesn't work.
Your supplier may not have the means to meet your manufacturing standards or the capacity to produce the quantity of goods you need. That's why it's vital to find a supplier with the capacity and the readiness to do the work your business requires.
Take the time to learn about all your potential suppliers, from their capabilities to their internal culture. A compliance audit can be an excellent way to obtain a clear picture of what a supplier can offer your business. A trusted auditor will be able to report honestly on compliance for any manufacturing company.
This early preparation will help you avoid frustrations and disappointments further into your partnership.
Identify Management Expectations From the Get-Go
The best way to avoid vendor compliance issues in the future is to communicate with your suppliers today.
If your company needs to meet specific delivery schedules or quality standards, make sure your suppliers know. The same applies to any restrictions, rules or regulations that apply to a product in your supply chain. Give your suppliers all the information they need to do their best work for you.
Don't try to micromanage your suppliers – this will frustrate them and strain your relationship. Instead, be clear about your business's needs, and use that communication as a starting point to build mutual trust.
That way, you and your supplier can work together to remain compliant with ethical and environmental standards.
Most companies are prepared to put source suppliers who can meet their standards. Even when it takes effort, they understand that the benefits are worthwhile. But what about maintaining those standards over time?
Your company will benefit from implementing measures to track supplier compliance. For example, you could consider appointing a manufacturing compliance manager who can take responsibility for your supply chain. You could also implement a regular factory compliance audit schedule to keep your suppliers' manufacturer compliance certificates up to date.
By monitoring compliance in your supply chain, you can avoid any unpleasant surprises in the future. You can ensure that your goods meet your company's standards in every area. And you can offer your suppliers guidance on how to improve if they fall short.
All of this means you can enjoy a longer and happier working relationship with your suppliers.
Ensure Supplier Compliance with Azolla
Are you ready to build a supply chain that will stand up to scrutiny?
At Azolla, we offer ethical accreditation that businesses and customers can trust. We perform thorough factory audits tailored to the requirements of the Modern Slavery Act. With a factory compliance certificate from Azolla, you can prove your business's commitment to supplier compliance.
Taking a proactive approach to compliance will build trust with your customers and improve your business's reputation. It can also offer peace of mind by affirming the integrity of your business's supply chain.
Contact Azolla today, and make a commitment to your business's future.