Understanding risk and compliance across your supply chain is now essential for any business. By successfully measuring and understanding supplier risk and compliance can ensure that risks are identified, managed, and mitigated. Below, Cority outlines five key steps to help you shape your supplier due diligence process to ensure that you are managing your suppliers effectively.
1. Define What Information You Need to Collect
It is important to establish the data you need to collect, and why. A good start is to ask questions such as: What supplier information is material to your organization? Do different supplier groups or categories have different compliance requirements? Do the reporting frameworks you use dictate the information required?
2. Engage Your Organization
In order to be successful you need internal engagement at all levels. All relevant parts of the business need to understand their role in supporting the supplier management program from initial contact through to supplier development.
3. Prioritize Your Suppliers
You probably won’t be able to engage all of your suppliers at once. Prioritize and segment your supplier list into groups using factors such as risk, spend, legislation or performance level. For example, regulations like the EU Corporate Sustainability Due Diligence Directive (CSDDD) require companies to assess and manage human rights and environmental risks in their supply chain, making it essential to identify high-risk suppliers and address compliance proactively.
Here’s some key information into understanding the directive and seamlessly integrating it into your organizational practices.
4. Identify the Solution that Best Suits Your Needs
Online solutions provide the best way to achieve high levels of coverage and compliance, giving you the analytical tools you need to identify risk efficiently. They all vary so finding the right one to suit your needs is important.
5. Define Processes for Dealing with Supplier Responses
The most important point from both a buyer and supplier perspective is to use the data collected. There should be assigned responsibility within the business for dealing with any non-compliance in specific areas, and there may be a need for a minimum overall standard for suppliers to meet.
Cority enables you to engage your suppliers through its award-winning supply chain sustainability software and support services. We provide a supply chain management software solution enabling your business with transparency and compliance across your entire supplier network.
