Compliance is a hotly debated topic within companies. Organizations are increasingly seeking transparency in their internal and external processes and negotiations. This is where the management of business partners or, more specifically, the risk management of these partners comes into play.
Factors such as the increase in outsourcing of activities, new regulations and legal obligations (such as SPED, Anti-Corruption Law and others) have increasingly exposed the risks inherent to relationships in the production chain. This is because it is not enough to ensure compliance within the organization; it is also necessary to ensure that partners follow a series of rules for the integrity of negotiations.
Compliance helps reduce supply chain risks
Imagine a retail business whose labor supplier uses irregular employees to manufacture products. Even though this is an outsourced process by the company, the responsibility for omission falls on the brand. Therefore, it is essential to ensure that suppliers follow all the safety criteria. governance, labor laws, and other rules and regulations. After all, no one wants to take risks with regard to their brand's reputation, right?
There are many companies that ignore the importance of this step. A recent study on “Third-Party Risk”, conducted by Thomson Reuters, interviewed approximately 1.132 companies in nine countries and revealed that only 55% of the Brazilian companies surveyed perform risk analysis (due diligence) of their subcontractors. This data reinforces that the lack of knowledge regarding the reputation of their suppliers (corruption practices, use of irregular labor, etc.) is high, which can even result in legal penalties for the contracting companies.
In this scenario, where companies are increasingly dependent on their suppliers, the challenge is to implement efficient risk management processes – from cleaning up partners’ registration data to assessing the reputation of the company and its executives. Aspects such as legal qualification, verification of tax and labor compliance, technical-operational qualifications and sustainability practices should be key points in supplier management. These aspects must be monitored constantly, not just when closing a deal.
Define processes and automate
Once the processes have been defined, it is time to carry out an internal alignment to deal with the pressure between the need to meet service levels (internal, such as deadlines for carrying out a purchasing process) and compliance with the standards established at the time of supplier approval.
Supplier approval is extremely important to help ensure the quality of partners' services and products. Many companies have a dedicated area for this topic, which seeks new ways to develop, implement and use automated tools to verify suppliers' complete documentation.
Automate this process Through technology, it brings benefits such as standardization and gathering of information in a single database, integration with other systems, issuing management reports and reducing the time invested in contracting and managing suppliers. In fact, it is worth highlighting the main advantage of automating operational processes: the purchasing team can dedicate itself to strategic and less procedural activities, actions that in fact generate value for the organization.
To summarize, paying close attention to the issue of suppliers is vital. While risks cannot be completely eliminated, knowing how to manage them using the right tools makes all the difference. In other words, efficient partner management is essential for the success of your company's purchasing department and for the success of the organization. Automate operational processes and shift your team's focus to what really matters: the organization's core business. Finally, pay attention to your suppliers, as they are an extension of your brand.
Marcelo Pereira, director of Supplier Management at Electronic Market.
Source: IT Inside
Other sources: Brazil Factor Portal, IT Portal Bahia, CIO Brazil Online, Business Consultant, Portal Administrators.
