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Being Proactive to Manage Supplier Non-Compliance

The rise of global sourcing as a means to minimize costs has had the unintended consequence of increasing risk. Dependence on an increasing number of suppliers makes it difficult to monitor their performance without automated metrics. According to a 2013 Supply Chain Resilience Survey, 75 percent of organizations experienced at least one supply chain disruption incident in the past year.

Being Proactive to Manage Supplier Non-Compliance

Perhaps the biggest driver that will ultimately cost organizations the most is the public (customer) outcry that occurs with each major brand recall or scandal.

In an age of social media, where negative public opinion spreads “virally” over the internet in a matter of hours, companies must take seriously the job of managing their suppliers to ensure that standards are being met.

In 2014, after being plagued by years of manufacturing and supply chain problems in emerging countries, more than one-third of U.S. businesses will continue the trend of “reshoring” in an effort to move critical manufacturing operations back to the States.

The goals of reshoring are to better ensure quality and other regulatory standards are met, and to avoid costly damage to a company brand from scandals, recalls, or shipment delays.

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