Regulations Change? Quickly Adapt with an Agile Supply Chain
In today’s heavily regulated world, changes happen fast. It can be hard to keep up, but failing to do so can have dire consequences. The heavy risks of noncompliance include:
Financial penalties that range from thousands of dollars to over a million dollars per infraction.
Lawsuits from injured, aggrieved, or displeased workers or clients.
Audits from the government, which can bring legal repercussions.
Dissolution, with the assets and property of your company being redistributed.
What Regulations are Changing?
Remaining compliant involves adhering not only to national, state, and local laws, but also to industry requirements, internal policies and procedures, and even expected standards of quality and practice. Because of the vast number of compliance guidelines, and the rate at which they are updated and changed, it can be nearly impossible to protect one’s company from vulnerability.
Just a few of the compliance categories that must be 100% adhered to include:
Employee wages and health insurance benefits
Improper conduct and discrimination
Workplace Safety and Workers’ Compensation
Business licensing and health permits
Data policies and security
Additionally, there are industry-specific compliance needs such as FDA guidelines for pharmaceuticals, PHMSA guidelines for pipelines, and so forth. The many areas of adherence and its evolutionary nature can quickly become a significant issue for any company.
What is an Agile Supply Chain?
An agile supply chain is one of speed, cost efficiency, responsiveness, flexibility, and productivity. To accomplish all this, supply chains must rely on real-time data to help make better day-to-day decisions and to supply more accurate forecasts.
There’s no doubt that the traditional supply chain is rapidly changing with forthcoming technology and evolving global relationships. However, being flexible and quick to respond in any scenario can make all the difference when margins are slim and competition is fierce.
How Do Changing Regulations and an Agile Supply Chain Relate?
So, what do ever-changing laws and regulations have to do with maintaining an agile supply chain? There is a strong link between being an agile company and performing well in risk management. One reason this is true, according to research firm McKinsey & Company, is that “agile practices can help companies navigate an increasingly volatile and unforgiving global economic environment.”
When laws, guidelines, policies, and expectations suddenly shift (which they often do), you cannot allow for a disruption in your supply chain or find yourself having to play catch up. Being agile in all things, including updating policies, procedures, and practices as soon as it is possible and practical, keeps you in the game and ahead of your competition.
How Can Your Company Keep Up?
If you worry about how to remain compliant amidst all the laws, regulations, and standards that seem to change constantly, don’t be! There are some things you can employ to safeguard your company against unknowingly committing offenses.
First, change your corporate culture to show how much compliance is an integral part of doing business. Lead by example, notice areas that can be improved upon, educate and have open discussions with employees, and work hard as a team to accomplish goals.
Second, maintain required paperwork and certificates so they don’t expire. Follow reporting requirements and monitor administrative upkeep.
Third, hire a compliance officer who is well-versed in the rules and regulations of your industry, and who is dedicated full-time to conduct audits, identify areas of improvement, and can immediately follow up on important items.
Finally, use a powerful verification software package that is customized to your specific industry, whether oil and gas, construction, telecommunication, pharmaceutical, manufacturing, or otherwise. Such software can perform important verification functions to keep you continually in compliance including:
The reason verification is so vital is because your own company can be held liable for hired contractors’ or suppliers’ own compliance shortcomings. This is a massive issue that cannot go unchecked. Fortunately, technologically advanced software helps you keep up and remain agile.
Want to learn more about how your supply can be ever more agile in today’s quickly evolving regulations environment? Request a demo from Avetta!