SDI Corporate Blog

Sustainable Results

Does your supply chain see… and comply?

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As the New Year began earlier this month, we acknowledged the impact of deploying supply chain best practices.  Since there was so much to share in one chapter, we saved two best practices for this installment: visibility and compliance.

Visibility 

Your supply chain may be fully automated end to end, resulting in robust transaction cycle times, but are you sufficiently integrated as you increasingly depend on a varied network of contractors and suppliers? How can you successfully manage and govern what you can’t see?

Perhaps we should begin with when to see. Real-time visibility into processes and data across your – and your trading partners’ – networks is vital. Dynamic decision-making and aging data make poor business companions and, even worse; often result in costly, missed opportunities. The hallmark of competitive differentiation is an operation whose swift, actionable insights and corrective actions result in optimal commodity price, quantity and service – all demonstrable value.

Earlier this year, Chris Jones, an experienced supply chain market executive, outlined his strategies for effective supply chain visibility. Two of our favorites?  Data and partner integration.  Jones sums up the criticality of data succinctly, “There is no life without water and no visibility without data. Do not underestimate the time and effort associated with getting data from your own and 3rd party systems.”

Now, let’s recall that our systems are integrated with trusted partners. Jones goes on to suggest, “Take no excuses from trading partners… scorecard data quality (timeliness and completeness) on a regular basis to keep maintain user confidence. Nothing kills a visibility project faster than when users do not believe what they see or that there are too many gaps in the data.”

Compliance

Simply put, compliance means conforming to a rule, such as a specification, policy, standard or law. Systems, supplier, process and contract… all varietal flavors of compliance. Implementing an organizational compliance program mitigates risk, saves money and may help avoid potential litigation.

Effectively negotiated deals reap no rewards if buyers by-pass these preferred suppliers and procure elsewhere.  Similarly, should invoices be paid if the invoice pre-dates the purchase order, or worse, there is no associated purchase order?

Neither are compliance programs the exclusive domain of goods purchased.  Services (contractor classification) compliance may realize the greatest reward when capably managed.  Labor resource misclassification has undergone incredible scrutiny from state and federal governments on the hunt to capture their due in unpaid taxes.  Employee misclassification (independent contractors vs. W-2 employees) issues may cost companies legal action, burdensome reparations and, ultimately, tainted reputations. Well executed compliance programs drive both hard and soft benefits.

As 2015 matures, and organizations continue to either enhance or outsource select supply chain procedures, it is more than reasonable to anticipate visibility and compliance topping the process reengineering checklist.

At SDI we are proud of our supply chain management capabilities, which allow for enhanced spend visibility, governance and high performance expectations. Likewise, we realize it is imperative to insulate our customers from the financial liabilities, legal risks and punitive damages resulting from co-employment / labor misclassification.

In 2015, as in previous years, we are resolved to further improve our processes and systems. We hope you are too!

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