Pinki Sharma, Product Manager - Social and Sustainability, Consultivo Business Solutions in India
The myriad of supply chain compliance requirements can be a complex web for buyers and suppliers. Pinki Sharma at Consultivo highlights the case of one company that cut through the complexity using an integrated approach.
Supply chains are a continuous series of processes, where the output of one supplier becomes the input of another until finally it comes to an end as a product that goes to the consumer. It´s a complex web in which each supplier can have multiple inputs and outputs and may have multiple buyers. Each buyer will often have a specific set of requirements for the supplier to comply with. Thus a supplier can face multiple sets of requirements from various buyers at any given point in time.
In addition, every buyer has different objectives, agendas and foci upon which their requirements are based on. Each of these buyers may also have their own standard against which the supplier’s performance is assessed and measured.
This realistic picture of the pressure in current supply chains is applicable to both buyers and suppliers, the only difference being that the buyer has to manage and measure the performance of multiple suppliers and the supplier has to comply with the requirements of multiple buyers.
So how can this complex situation be simplified? One of our recent projects within the food and beverage manufacturing industry points to one approach that could be implemented on a wider scale. The supplier we worked with had, as expected, multiple requirements from various buyers, focussing on various sustainability aspects e.g. environment, social, safety, quality, food safety, in addition to legal compliance. The challenge was to implement, comply, manage, monitor and take corrective and preventive action wherever required. The situation became more complex due to limited human resources, multiple sites and a lack of expertise.
The problem was solved through an integrated approach model wherein an integrated standard was developed from the various standards. The requirements of all the standards were integrated thus combining the common or overlapping ones into one. The integrated software was converted into an operational software tool with a management dashboard, complete with conformity and non-conformity warnings and recommended corrective actions.
The company implemented capacity building around the requirements of the integrated standard. This was comprised of documentation, internal audit and auditing techniques as the first steps, followed by training on internal audits.
The organization benefitted by reducing its costs and the time it spent on reworking compliances and providing documentation. Streamlining via the integrated software helped it easily manage multiple audit requirements and ensured the timely closure of non-conformities. A simple and effective idea thus delivered better performance, better management, better buyer-supplier relations and a better business.
Image by Pinki Sharma.