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Compliance Management

Compliance can be defined as either a state of being in accordance with established guidelines, specifications, or legislation or the process of becoming so, but what does this mean in the context of the supply chain? In the supply chain, compliance is a universally nebulous concept that every provider has a solution for, even when they don't have a definition.

In the supply chain, compliance management only has meaning with respect to a given function. The primary functions where compliance is a major concern, and where you can find software-based solutions, are the following:

  • Contract Compliance
    In supply chain, the goal of contract compliance is to make sure that your procurement personnel are buying on contract, honoring your commitments, and realizing the negotiated pricing.
  • Regulatory Compliance
    In the supply chain context, regulatory compliance can refer to the process of insuring that you are in compliance with financial reporting regulations, product restrictions, trade requirements, and environmental compliance.
    • Financial Compliance
      The goal of financial compliance is to insure that books are kept, and reports are filed, in accordance with accepted accounting practices and, in the US, that the Sarbanes-Oxley Act is adhered to.
    • Product Compliance
      The goal of product compliance is to insure regulatory requirements for safety are met. This is big for companies in, or importing into, the EU where they have to contend with RoHS, WEEE, REACH, and the ELV.
    • Trade Compliance
      Trade compliance is becoming more and more of a challenge each day with recent changes to the Mod Act, the now (more-or-less) mandatory ACE system in the US, the new 10+2 requirement in the US, the Modernized European Customs Code, NAFTA, and the thousands of similar regulations and trade agreements around the globe.
    • Environmental Compliance
      Environmental compliance is the process of adhering to environmental regulations in effect, environmental policies, and requirements that you expect may become law in the (near) future.
  • Vendor Compliance
    Vendor Compliance usually refers to the process of insuring that your vendors have the requisite certifications, insurance, and authorizations to provide you with goods or services. It might also refer to the process of insuring your vendors are complying with your contracts, but generally refers to the former.

For more insights into Compliance, please see the following posts:


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