Recent years have brought a spate of breakdowns and recalls in various industries, including some surprising sources of malfeasance in well–regarded companies such as Volkswagen in Germany. At the same time, in response to this, regulations and laws are being tightened, with a rising number of regulatory documents required for a wide range of industries.
Supplier “regulatory compliance” should be considered a subcategory of supply chain quality management dealing with the management of compliance documentation. The legal aspects are outside of the QA realm, but it’s focused on the supply base. It’s also an arena that can either be pulled in the direction of greater costs for fewer results, or, in the direction of greater efficiency leading to competitive advantage.
To review, documentation that accompanies the flow of material, the Certificate of Analysis (COA), is attached to the shipment of materials by lot. It is a one-to-one relationship with regard to timing. Each shipment’s lot is accompanied by one COA. The periodicity of COAs is dependent on the periodicity of shipments.
The other kind of documentation that is not related to any specific shipment of materials, but rather, to time constraints often outside the control of the company includes: industry regulatory documentation, compliance with company best manufacturing practices, conflict minerals, documentation relating to human rights practices such as the use of child labor, the frequency of audits, and other documentation required by regulatory or foreign government agencies. These documents have their own schedules, some required more frequently than others. They often require that different links in a supply chain must produce documentation attesting to actions for which the client is, in the end, responsible.
This means that you, if you are managing a complex supply chain, are responsible, in aggregate, for the compliance of your suppliers not only in the domain of the physical quality of their shipments but for this opaquer domain of regulatory compliance.
This means that however the cost of overseeing each of these steps, the doubling back to follow up, hits your company at the bottom line. To make sure your company is in compliance, you have staff (or staff time) dedicated exclusively to overseeing your suppliers to ensure their compliance. This staff takes actions such as:
- Sending notices to suppliers about specifications.
- Issuing document and certification requirements.
- Sending reminders about what is required and due dates.
- Issuing follow-up communications
Once the certifications have been gathered, they must be examined, approved, filed, and follow-on reports submitted with additional documentation produced to satisfy requirements at various levels, different jurisdictions and perhaps even different countries.
If the work is being done by people all the way down the line, the information that is transported communicated by any number of means back and forth may not be standardized. This means that, while information is being gathered and disseminated, it has little chance to be aggregated, summarized, and transformed into knowledge.
Knowledge gives insight, and it is the driver of action at a more strategic level than simply ensuring to ensure the compliance of one supplier at one given moment in time.
Automating Supply Chain Compliance
By automating the process of ensuring compliance throughout your supply chain, your company can accomplish a number of important tasks.
- When suppliers submit material documentation (specification collaboration, and later a certificate of analysis) using a standard interface rather than supplier-unique documents, there is time to avoid substandard material from entering the next link in the chain, which saves time and money. A Software-as-a-Service solution such as GSQA® can automatically stop shipments until the situation is remedied.
- Shipment approval can also be tied to regulatory compliance, as well as to the use of best practices. GSQA® can stop shipments until the document compliance situation is remedied.
- Because of the digital nature of the system, your company has access to material Statistical Process Control (SPC).
- The system can quickly show material trends towards non-compliance. Trends can warn you about dangers ahead before the problems become dangerous and costly.
- SPC can prevent fraud. Falsified statistics quickly show up and can be addressed after comparing supplier COA test data with in-house or 3rd party labs tests.
- For assigned compliance documentation, GSQA® shows a dashboard of document submittals, approvals, and dates of key events in the cycle.
- Overall compliance scorecarding can be accomplished via the Advanced BI Reporting in GSQA®.
In short, using a system like the GSQA® service to automate the management of your notifications, required documentation submittals, follow-up reminders and finally, the threat of halting shipments empowers the compliance department’s efforts.
The result is a streamlined process, helping your company close the gap between the reality of what your supply chain produces, and your company’s goals and standards.