Handling the Rigors of Global Compliance
Compliance is an intrinsically complex and often misunderstood part of the global supply chain. Unlike other functions such as purchasing and receiving, which generate a lot of attention and activity, successful compliance is gauged when absolutely nothing happens—when freight leaves its origin and arrives at its destination on time and intact.
But as soon as one shipment gets delayed or misdirected, it becomes the compliance manager's responsibility. Ensuring that product moves smoothly from origin to destination takes hours of research, planning, and coordination among key individuals within the supply chain. The most important function of a global compliance manager is to integrate compliance into the supply chain so that it becomes fundamental in both the planning and execution of global logistics processes.
Five Fundamentals of Global Compliance
Here are five fundamental guidelines for establishing and maintaining an effective global compliance program:
1) Map your global supply chain product flow. Identify and document key contacts, processes, and procedures at each origin and destination. The value of supply chain visibility cannot be overrated. It provides an invaluable tool for obtaining additional information from any global location. Issues that arise can be dealt with quickly and effectively knowing that key contacts have been made in a timely manner.
2) Educate your supply chain team. Provide compliance training to all members of the supply chain team. All members need to understand the role they play in a successful compliance program. Make sure to include training for your overseas suppliers and service providers as well, because they are important links that often get overlooked in the supply chain.
Accordingly, correct foreign documentation helps avoid potential customs delays and penalties. By providing an enhanced understanding of compliance issues involving invoicing and transportation documentation, your suppliers are better equipped to make proactive compliance decisions at the beginning of the supply chain.
3) Engage your inbound logistics team. The smooth flow of product through the pipeline begins with correct documentation. For this reason, compliance and inbound logistics are virtually inseparable. Building a strong relationship and process to share information among supply chain partners is vital to uninterrupted product flow. Failure to obtain the support, understanding, and cooperation of your inbound logistics team can result in frustration.
4) Integrate yourself into the supply chain. Global compliance is frequently viewed as a necessary evil. Unfortunately, not all criticism is invalid. It is crucial to integrate compliance into the supply chain in such a way that team members perceive the compliance department as a valuable asset rather than an adversarial agent.
5) Develop a plan. It is impossible for any one person to stay current on the import and export compliance regulations of every country. If you manage a complex compliance team or network, try organizing from a regional or specialty point of view. Gather the team regularly to share information. If you are on your own, ensuring compliance becomes far more complex. Organizing by country risk level may be a possible working solution.
Regardless of scenario, take advantage of email services, conferences, trade periodicals, and web sites to keep up to date on current compliance issues. Include supply chain periodicals in your education to better understand the challenges facing your colleagues. Share your research with other supply chain team members. Failure of the compliance manager to stay current on multiple discipline levels puts the entire corporation in both regulatory and financial risk.
Becoming a Vital Link
September 11 changed the role of global compliance forever. Customs TPAT (Trade Partners Against Terrorism) and the Presidential CSI (Container Security Initiative) are evidence of a radical change in governmental enforcement. By adopting the suggested five guidelines above, those of the TPAT and the CSI, and developing some of your own, today's global compliance manager can be a vital link in the safe and uninterrupted flow of product through the supply chain.