Compliance during the procurement process is vital to ensuring an ethical supply chain and sourcing strategy. Maintaining compliance and integrity through various methods is essential to avoid legal and reputational risks that could cause long-lasting damage to your business.
Understanding the tender management process requires organisations to implement the best practices and strategies to maintain sourcing compliance. This article will cover everything you should know about compliance and ethics in eSourcing processes, including how to ensure compliance during procurement activities and the benefits and disadvantages of the global supply chain.
How to Maintain Compliance and Ethics in eSourcing Processes
Ethical sourcing is a significant concern in the modern business world. Given that 62 percent of UK citizens prefer companies with a moral message while 40 percent of consumers are willing to spend more on ethically sourced products, maintaining compliance in eSourcing is more important to your business than ever before.
But how can you maintain compliance and ethics during the procurement process? Here are some of the best ways to ensure procurement compliance in your supply chain to meet the wants of the modern customer.
- Include Supplier Compliance in Your Risk Management Strategy
A robust supplier risk management framework can help monitor compliance and ensure that your suppliers are ethical and meet necessary regulations. Your supplier risk management strategy helps organisations accurately identify, assess, and address potential risks from various suppliers.
Supplier compliance reflects on your company, making it vital to have adequate risk management tactics prepared to avoid profit loss and supply chain issues.
- Practice Supplier Onboarding
New suppliers may seem trustworthy, but this isn’t always the case. To avoid deception and compliance issues, organisations must practise effective supplier onboarding. The supplier onboarding process ensures compliance by allowing the organisation to assess the required proof of compliance provided by the supplier. Ensure that all proof of compliance documents are renewed and not expired before moving forward with a supplier and devising a contract and that all documents are legitimate.
- Use Technology to Boost Procurement Compliance
The modern business environment is driven by technology and digital compliance solutions. Implementing technology solutions to boost procurement compliance is necessary to stay on top of business trends and appeal to various audiences.
Advanced and comprehensive software can improve your supplier compliance by tracking the performances of your suppliers and providing transparent, insightful data to understand the procure-to-pay (P2P) process.
- Perform Frequent Audits
Auditing your organisation is crucial to ensure compliance and avoid unethical sourcing that reflects poorly on your business and damages its reputation. Auditing your procurement process can identify issues and risks within your organisation where you fall short of compliance standards.
Audits determine potential weaknesses in your compliance framework to protect your organisation and guarantee that your supplier partners follow your business’s compliance standards. These audits also increase your control over your business operations by providing critical insights into your procurement processes.
- Have a System to Report Non-Compliance
Addressing non-compliance incidents when they occur is crucial to showing responsibility and dedication to ethical business practices. Organisations require a system to report and address incidents to guarantee procurement compliance.
Your reporting system must offer a concise and accessible process for employees to report suspected compliance violations efficiently. Ensure that your reporting process remains confidential to foster transparency within the workplace.
Your system should also include corrective steps to help prevent similar incidents from occurring. Consistently assess and adjust your non-compliance reporting process to improve and show your commitment to ethical practices.
- Implement High-Quality eSourcing Software
Encouraging ethical sourcing is possible when organisations use high-quality eSourcing software to find compliant suppliers. eSourcing software can offer reliable procurement compliance solutions to assess suppliers properly and communicate with potential suppliers before entering into a partnership.
Comprehensive eSourcing solutions like Delta can support compliance and ethical sourcing in the following ways:
eSourcing software helps discipline organisational processes and allows employees to plan and manage supplier interactions.
eProcurement solutions allow buyers to manage hundreds of suppliers without getting overwhelmed with vetting each supplier for their ethical policies.
eSourcing software helps organisations consolidate suppliers, making it easier than ever to achieve ethical procurement.
The Advantages and Disadvantages of the Global Supply Chain
Guaranteeing compliance in your procurement and eSourcing practices requires knowledge of certain advantages and disadvantages of global supply chain sourcing. The global supply chain describes a network spanning several continents and countries to source and supply products and services from global entities.
The global supply chain covers virtually all business processes and activities, making it an incredibly complex system for many organisations. The global supply chain has various benefits and downsides for buyers and suppliers alike, explained in the following sections.
Advantages of the Global Supply Chain
Global sourcing through the global supply chain is widespread because it has several benefits that appeal to buyers and suppliers. For many organisations, global sourcing is the best option to profit consistently and streamline supply chain processes.
While there are multiple benefits of the global supply chain, the following are among the most notable:
- Reduced labour and operating costs for buyers
- Opportunities to increase innovation
- Opportunities to take advantage of the advancements made in other countries and new markets to keep your supply chain competitive
Disadvantages of the Global Supply Chain
Despite the advantages of the global supply chain, organisations should consider the following disadvantages before sourcing from global suppliers:
- Longer lead times because of lengthy shipping processes
- Reputational risks that accompany global sourcing and unethical practices like modern slavery
- Fluctuating exchange rates
- Loss of control over your organisational processes because of distance
- Access the Compliance Benefits of Delta eSourcing
The benefits of contract management systems can help public sector organisations thrive and grow. By investing in ethical sourcing solutions, organisations can ensure transparency, fairness, and integrity in all procurement activities to avoid significant risks to the business.
Advanced contract and procurement management tools like Delta eSourcing are essential for modern businesses hoping to thrive with a streamlined supply chain process. Delta eSourcing helps organisations identify compliance and ethical issues in eSourcing processes to make necessary adjustments and prevent future non-compliance.
Request a demo today to discover how Delta eSourcing can guarantee compliance in your eSourcing processes.