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Comply and Beware These Supply Chain Regulations Featured

Comply and Beware These Supply Chain Regulations "Lady holding the smartphone in front of the window. "

As we try to open a new chapter after a year of untold suffering and unprecedented disruption, we can look back at where we have come from and see what we did wrong and what we did right. 2020 has taught us lessons about what we lack and has shown us things that we can improve in the future. As we enter the middle of 2021, we need to be prepared, and this can be attained by setting up better policies and regulations and identifying risks in the supply chain sector. Here are some risks and regulations that you must be aware of and comply with this year.

  • Financial fraud

Financial fraud comes in many forms. It can be in the form of collusion, poor monitoring of employee expenses, or falsified labor and bills. This risk has caused many issues between organizations and governments in various countries, and most companies are now using data analytics tools to detect fraud and vendor waste. Fraud mainly occurs because most supply chain executives do not scrutinize items but are instead focused on identifying the high-level trends in invoices. This fraud can be minimized by auditing vendor bills and activities and using analytics technology to assess them. 

  • Supply chain management regulations

As the supply chain industry continues to become complex, new rules and regulations keep emerging. Supply chain companies are required to disclose information regarding their sourcing practices. One such regulation is the Transparency on Trafficking and Slavery Act which requires organizations to file annual reports with SEC, showing human rights risks in their supply chains. For supply chain firms dealing with food items, FDA requires them to ensure safety through the Sanitary Transport Rule. There are controls in the transportation of food items and sourcing materials with certain minerals that the supply chain firms must adhered to. Other regulations are those needed to ensure supply chain visibility and transparency.

  • Cybersecurity threats and regulations

Many supply chain firms are reluctant when it comes to protecting the most critical data and systems. This often leaves the crucial customer information, business processes, and other crucial components vulnerable to attacks. As the supply chain industry becomes increasingly connected, cyber risks have become more dangerous than other risks such as environmental conditions, fire, or social unrest. They can come from anywhere and can cause extensive damage within a short time. To avoid this, governments and supply chain companies have developed regulations and security controls that govern the use of data. GDPR is one of the regulations that has impacted many players across industries. Apart from this, some of the strategies that can be employed in addition to these regulations are buying only from trusted suppliers, encouraging collaboration between supply chain companies, governments, and IT security companies.

  • Procurement compliance  

Product distributors and suppliers encounter various challenges when it comes to minimizing procurement, transportation, and fulfillment time at such a time when globalization has taken root. Therefore, regulations have been developed to improve communication and operations between distributors, manufacturers, and third-party logistics (3PL) providers in handling the transportation of products across borders. These regulations minimize distribution costs and mitigate risks associated with product damage. It is also essential to draw a supplier code of conduct that takes into account legal requirements and expectations to original equipment manufacturers (OEMs). 

Supply chain regulations continue coming up to address the growing number of risks in the supply chain industry. Companies are now required to disclose many things about their operations, such as information about their products such as composition, origin, and the status of regulation of a specific product. As a supply chain industry player, it is critical to manage such data, but doing so is becoming difficult due to many regulations that have come up. 

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Scott Koegler

Scott Koegler is Executive Editor for PMG360. He is a technology writer and editor with 20+ years experience delivering high value content to readers and publishers. 

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