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Here’s How Much Compliance Relies on Supply Chain Visibility

Manufacturers today face an uphill battle: consumers want products faster than ever before, and they demand visibility into how these items are being produced. Sustainable products have become a “must-have” for consumers, which adds another layer of complexity to supply chain operations.

To tackle these challenges, many brands are prioritizing visibility in their supply chains, enhancing data sharing and connectivity for more effective collaboration. On the surface, this appears to be a win-win. Companies that have created more transparent supply chains are seeing optimized production and inventory management, reduced costs and better trust with customers. But can manufacturers easily balance compliance and visibility?

Creating a transparent and compliant supply chain can be tricky, but not impossible. To attack this problem head on, companies must first understand the current compliance jungle and how to navigate through the trees.

APIs: The secret sauce to the visibility challenge

The first step to a compliant supply chain is one that allows for full visibility. Application Program Interface (API) is an intermediary that enables data sharing and real-time connectivity between different software platforms, trading partners and IT systems. It allows companies to unify their operations and streamline business processes and data management, thus enabling a more transparent and collaborative end-to-end supply chain. When a supply chain is fully integrated from manufacturing all the way to sales, it allows, for example, footwear distributors to see from the retail system that there is a particularly high demand in spring for rain boots in Seattle and can auto-generate a PO for more goods. With a transparent supply chain, the manufacturer can determine which factories have the capacity to produce more rain boots and ensure the necessary supplies are available.

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Get global: Know local laws

Manufacturers are always on the hunt for ways to expand operations and drive down cost, which can lead to moving locations. But before packing their proverbial bags, companies should first do the requisite due diligence to understand the regulatory landscape. Each country has its own laws and regulatory challenges, and this can drive up costs and technology needs. According to a recent Dun & Bradstreet survey, 65 percent of professionals noted regulations increased risk to their business.

Managing this all goes back to supply chain visibility. When GDPR (the General Data Protection Regulation) was first announced, supply chain manufacturers were forced to map out where and how their data was being used. Visibility is the first step toward compliance, especially as more awareness and laws are focusing on consumer data transparency.

Automation: Reversing the curse of human error

Human error continues to be one of the biggest compliance challenges for many supply chain operations. With the advent of automation, smart solutions can help to automate reporting and administrative tasks that had traditionally been subject to human error. Smart solutions on the factory floor, for example, can automate the collection and reporting of production activities. This provides real-time analytics into overall efficiency and production in the factory as well as tracking labor rates and hours worked, allowing managers to make adjustments to meet productivity and compliance standards, as needed.

Get ready for the next-gen technology takeover

While the rise in IoT and connected technologies has enabled manufacturers to do more than ever before. However, it’s bringing on new and different compliance challenges. An increase in these connected devices and solutions within the supply chain can also lead to an abundance of data, and the forthcoming compliance challenges within data management.

However, blockchain technology can connect and extend platforms to communicate with each other to ensure connectivity across the supply chain. Each individual supplier and vendor added to the distributed ledger allows for full effectiveness and visibility, allowing for each supplier to prove and maintain compliance. Ensuring blockchain connectivity across the supply chain can assist in maintaining compliance within the end-to-end chain, adding visibility for both suppliers and customers.

Safeguarding your brand integrity

Not only must manufacturers and brands ensure that their supply chain technology is secure from a cyberattack, they must consider security and compliance as it relates to the health of the business. Security isn’t just about maintaining productivity, it is about ensuring brand integrity. Noncompliant businesses will not only face regulatory risks, but also run the risk of losing loyal customers who value compliance and transparency.

Across the globe, companies are taking action to demonstrate their brands’ integrity. For example, Levi Strauss & Co. and The World Bank Group’s International Finance Corporation pledged to reward garment suppliers for stronger labor, environment, health and safety performance. This initiative offers a good example of a brand maintaining transparency and compliance, ensuring long-term customer loyalty.

In today’s world where purchases can be made with a click of a button and shipped overnight direct to consumers, meeting the consumer demand but balancing it with compliance and transparency mandates must be a priority for manufactures. Armed with the right tools, manufacturers can achieve supply chain and compliance visibility, and meet rising consumer demand.

Paul Magel, president of business applications and technology outsourcing division, CGS, leads the company’s flagship BlueCherry Enterprise Suite of solutions for the fashion, apparel and consumer lifestyle products industry.