In 2017, the World Trade Organization (WTO) ratified the Trade Facilitation Agreement with the intention of standardizing supply chain procedures on a global scale. Bringing together these rules and regulations was far from a simple process; it took the WTO over 20 years to draft and fine-tune the Agreement and it’s highly probable that full implementation will take several years to accomplish.
This fact alone demonstrates how regulatory compliance in supply chain management has evolved into an intricate, many-headed hydra.
Keeping Pace with Constant Change
The supply chain domain continues to transform wildly as more trade requirements are implemented daily. From local to national to even international levels, supply chain regulations have become a veritable labyrinth that pose many challenges to U.S. businesses.
In addition to the regulations enacted by various governments, companies must also answer to a slew of agencies and adhere to a wide range of industry standards. RoHS, REACH, the FDA, the U.S. Securities and Exchange Commission, U.S. Customs and Border Protection's Automated Commercial Environment (ACE) system, and OSHA are just a few of the standards and organizations companies must defer to on a regular basis.
Addressing Conscious Consumers
Aside from the regulations themselves, companies now also have to contend directly with the governances set forth by the court of public opinion; In today’s digital society, consumers are more socially and politically conscious of the supply chain system than ever before.
It’s becoming increasingly important for consumers to purchase items that were manufactured under the most ethical standards. Questions about humane labor, safe working conditions, environmental stress, and material sourcing are now common topics of discussion in public discourse.
This dialogue unavoidably plays itself out on social media, where consumers, activists, and businesses have immediate and constant access to one another. In the fast-paced realm of viral tweets and shares, a company’s reputation can be irreparably tarnished within a matter of days.
Competing with Global Growth
To further complicate matters, the international community of suppliers is steadily expanding at an exponential rate. While having an overabundance of options can be a good thing, it also makes the process of selecting an ethical supplier much more convoluted.
Consequently, transparency is now increasingly important in supply chain compliance and management. Companies are no longer only accountable for their own actions – they are also being scrutinized for their suppliers’ practices.
To reassure customers that they are socially responsible organizations fully committed to ethical supply chain management, companies must adhere to complex and mercurial regulations while also providing full traceability.
Employing Technological Supply Chain Process Solutions
Predicting the future of supply chain compliance and subsequent risk management has become an enormously arduous task. Without a proper plan in place, keeping track of all the requirements can easily result in a torrent of confusion and disorder. Inevitably, this chaos will eventuate in delayed shipments, inefficiency, and wasteful downtime.
However, there is a wide array of tools available that companies can apply to their supply chain processes to help level the playing field and eliminate some of the disruption caused by these ambiguities and obstacles.
Taming the Supply Chain Compliance Beast
One way to successfully and consistently address supply chain compliance issues is to acquire a third party partner who specializes specifically in this subject. An analytical expert partners with a company to handle all the necessary paperwork, keep up to date with the constant legislative fluctuations, juggle a multitude of demanding codes required by various agencies, and manage supply chain databases.
Current and emerging technological advancements can also serve as powerful tools for achieving the highest level of supply chain integrity.
While the use of automation and robotics is nothing new to supply chains, these practices will become more refined over time. As robots become more sophisticated they accomplish more and increase productivity, counteracting labor shortages. The use of robots also assuages safety compliance concerns by replacing susceptible human employees with automated alternatives.
Another technological breakthrough already making an impact on the supply chain is the Internet of Things (IoT), which enhances traceability and facilitates connections among technology.
The Future of Supply Chain Compliance and Management
Without having a flexible plan in place, state-of-the-art technologies and industry experts are limited in their supply chain compliance management tactics. Ultimately, the strongest weapons in any company’s arsenal will be well-crafted contingency plans and versatile solutions that are based on continual ebb and flow of supply chain regulations.
By recognizing past and current regulatory trends, and then using these insights to identify possible future scenarios, companies can continue to operate seamlessly and boost productivity without being impeded by supply chain regulations and compliance issues.
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