13 Ways to Strengthen Supply Chain Management
Each area of Procurement and Supply Chain Management has its unique challenges, and the mobility area is no exception. Buying services, rather than commodities, presents its own difficulties, and supporting more than 150 countries and nationalities increases the complexity significantly.
Global mobility leaders and supply chain managers in more sophisticated markets, like the United States or United Kingdom, often express frustration over suppliers that can’t meet the latest data security requirements or their disregard for anti-bribery regulations. In general, suppliers don’t always understand how to adhere to these requirements and regulations, so it’s important for companies to support suppliers through the changes. If conducted properly, due diligence should be seamless and result in an improved employee experience. This behind-the-scenes work is the foundation of any strong supply chain and is critical to not only providing high service levels, but also to protecting clients and mobile employees.
Here are the 13 areas of governance and compliance that will develop a strong Supply Chain Management function:
Every supplier should have a detailed service contract. Each contract should include:
- Relevant scope of services
- Meaningful service level agreements (SLA)
- Levels of reporting
- Solid terms and conditions that match the business needs for the service rendered
Effective supply chain management requires guidance for suppliers in addition to managing the terms of the contract. for example, offering templates on how to develop an effective business continuation plan.
Suppliers are an extension of your organization’s brand and should be trained to deliver services in adherence with your organization’s brand requirements. By offering service training you can ensure your suppliers provide services consistently regardless of location. Offering online video-based training will drive greater consistency and accessibility to training.
Training should also regularly be provided on compliance fundamentals such as anti-bribery and corruption. Proper training affirms true understanding and pro-actively mitigates risk for organizations and mobile employees. Simply requiring a signed compliance contract will not suffice.
Suppliers require updates on changes in the law. For example, a small destination services provider in Cambodia may not be aware of Privacy Shield changes that are being discussed in the United States. While it is the supplier’s responsibility to be abreast of all changes in laws and/or regulations affecting their business, supply chain managers should take overall responsibility, ensuring the supplier understands the change and remains compliant.
Assessing a supplier’s compliance should be conducted regularly verifying each supplier is compliant with your organizations standards. Releasing updated training on a regular basis and ensuring all levels of the supplier organization participate in the assessment is one way to check a supplier’s compliance. Performing regular reviews against key criteria, including performance results, is also essential and will offer suppliers the opportunity to recover service levels in the event they drop.
Thorough Request for Proposals (RFPs)
RFPs should be more than a procurement exercise. To accurately assess services in a market, an RFP should ask questions in an e-procurement environment and validate the responses. To validate the results in an RFP:
- Investing in site visits – visit their location and play the role of the relocating employee
- Test service levels – have a briefing call and take a home-finding tour with the supplier
- Audit compliance
Validating the responses can uncover deep discrepancies between actual service provisions and the RFP response.
Determine an appropriate RFP cycle for the types of suppliers in a supply chain. Running annual or regularly scheduled RFP’s can work against business objectives. Some suppliers may find it less desirable to work with companies that require significant additional work each year (e.g. completing RFP questions, hosting site visits, negotiating contracts). Industry-leading supply chain functions are becoming more considerate of the resources required to conduct an RFP and implementing alternative approaches to traditional RFPs. For example, conduct a formal assessment of a supplier’s performance and value-add at least once a year, while reserving he full RFP process for a reassessment or necessary change.
Audits and assessments
Perform audits that check a supplier’s compliance with several factors including:
- completing the latest anti-corruption training
- providing a copy of the supplier’s current business license or insurance certificate
- adhering to companies’ system updates requirements
Complete routine assessments as well. During these assessments supplier chain management teams test suppliers’ service delivery methods, assess the skill sets of local staff and ensure they are delivering services as expected.
Education of the wider business
Educate client and customer facing employees about the risks of using suppliers who have not been properly assessed. Companies often ask, “Can we use my supplier in X country?” While this supplier may provide excellent service, they may not meet due diligence requirements, so it’s essential to educate all stakeholders on the complexities of supplier selection – it involves so much more than just providing an excellent service experience.
Hold all suppliers to the same standards, as risks are equally present regardless of size or service. Invest in those suppliers that are passionate and provide great service, to help them meet the standard due diligence.
Suppliers, including field consultant and freelancers, should never use personal email accounts (e.g. Gmail or Yahoo!) to communicate confidential information such as personal identifying information, social security numbers, date of birth, etc. This information should only be communicated in a secure email and suppliers need to have a compliant process in place to ensure these emails are encrypted.
Taken in aggregate these practices will help companies’ mobility supply chain management ensure high service levels and compliance.
Learn more about BGRS’s Supply Chain Management services, click here.