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Supply Chain Quality and Compliance: Why It Matters
Customer Success Manager
On March 14th 2022
Supply chains are incredibly complex, interconnected networks that span multiple continents, systems, and organizations. A common framework is essential, with quality and compliance management being central to agreeing standards across multiple areas. But, understanding and implementing these standards is challenging—stakeholders have different incentives, regulations change between countries, and quality definitions can vary.
This means supply chain businesses need an integrated approach to quality and compliance management. A digital supply chain platform will significantly improve how you manage the quality of stakeholders, products, and processes. We’ll explore some of the drivers behind compliance management and quality, and show how you can use them to drive greater accountability and higher standards through your supply chain network.
An Overview of Quality Management and Compliance Management in the Supply Chain
Here’s a quick refresher on how supply chain companies use compliance and quality management.
Compliance Management for the Supply Chain
Compliance management ensures that supply chain suppliers, manufacturers, logistics companies, and other stakeholders meet regulatory requirements set by governments and industry bodies.
Many regulations apply broadly across supply chain niches but can vary widely between countries, for example:
Employment law and worker protections.
IT security and data protection for businesses and individuals.
Health, safety, and environmental impacts.
Product supply, manufacturing, and safety.
Financial regulations, fraud protection, export controls, and anti-corruption.
Additionally, certain industries and countries have their own stringent regulations, such as HIPPA in the US or the German Supply Chain Act in Germany.
Compliance management is about ensuring that you and other stakeholders meet these regulatory requirements. It includes:
Awareness of the various regulatory frameworks that apply to supply chain companies.
Ensuring that you and your supply chain partners have the right processes in place to certify compliance.
Measuring, tracking, and reporting on compliance with regulatory frameworks.
Identifying and resolving issues that prevent compliance.
Adhering to regulations and legislations and proving this to inspectors and regulatory bodies.
Quality Management for the Supply Chain
Quality management and compliance management are related—products must meet certain standards for health and safety, and be manufactured in accordance with regulations and legislation. But, quality management also goes a step further, with a focus on manufacturing products that meet and exceed customer expectations and provide a competitive advantage. Quality management and assurance are central to brand reputation and consumer trust.
Quality management isn’t just about manufacturing, either. It brings together many disciplines for supply chain businesses:
Implementing standard operating procedures to create a unified approach for every part of the company.
Integrating quality throughout all design, development, manufacturing, and support processes.
Partnering with suppliers, vendors, and logistics companies that also work to strict quality standards.
Certifying quality assurance to internationally recognized standards like ISO 9001.
Trends and Drivers Impacting Quality and Compliance Management
Several trends are combining to create an increasingly challenging environment for compliance and quality management. New legislation, consumer demand, worker protections, digitalization, competitive marketplaces, and COVID-19 are all creating fast-changing, demanding circumstances. These include:
Introduction of Quality 4.0: The rise of Industry 4.0 provides new opportunities for quality management as part of “Quality 4.0,” which will lower costs, raise efficiency, ensure compliance, and improve quality.
Increasing accountability standards across the supply chain: Regulations are going beyond just complying within your own business—legislation like the German supply chain law makes businesses accountable for their suppliers as well.
Integrated quality approaches: The interdependence of the supply chain is increasing the need for shared data that provides a single source of the truth that supports automation, common workflows, transparency, and competitive advantage.
COVID-19 driving more rapid digitalization: The pandemic has disrupted supply chains, reinforcing the need for robust supply chain risk management.
Convergence of Environment, Health, and Safety: Consumers and businesses are increasingly aware of the need for good governance. Environment, Health, and Safety (EHS) no longer exist in isolation, and supply chain businesses must support stronger Corporate Social Responsibility.
These areas combine to make it more important than ever to collect, organize, analyze, and maintain supply chain data. The right digital supply chain platform and quality management tool uses this data to stay ahead of compliance challenges, meet internal and external needs, and reduce costs.
Quality management is becoming even more important through a focus on “Quality 4.0.” Quality 4.0 is a natural evolution of Industry 4.0.
“Industry 4.0 refers to a new phase in the Industrial Revolution that focuses heavily on interconnectivity, automation, machine learning, and real-time data. Industry 4.0, which encompasses IIoT and smart manufacturing, marries physical production and operations with smart digital technology, machine learning, and big data to create a more holistic and better-connected ecosystem for companies that focus on manufacturing and supply chain management.”—Epicor, What is Industry 4.0—the Industrial Internet of Things (IIoT)?
Quality 4.0 supports this through:
Collecting, analyzing, and centralizing robust supply chain data to provide clear and accurate tracking, benchmarks, and KPIs.
Predicting and modeling supply chain scenarios to ensure quality standards are maintained for all circumstances and use cases.
Connecting devices, processes, and people for continual monitoring and quality assurance at every stage of manufacturing and other areas.
Implementing automation, machine learning, artificial intelligence, and low-code apps to provide a technological advantage.
Allowing for flexible demand and supply through efficient systems that drive low-waste, distributed production.
Quality 4.0 ensures that modern supply chain companies meet and exceed consumer, compliance, and competitive needs.
How a Digital Supply Chain Platform Strengthens Quality and Compliance Management
Supply chain companies like yours can use innovative software tools to manage a range of quality, compliance, and EHS processes. These might include:
Customer complaints management
Root cause analysis and remediation
Bringing your tools together onto one platform greatly increases efficiency and provides deeper analysis and insight to strengthen your quality management. Investing in the right technology improves quality outcomes and transforms your assurance and compliance practices.
Digitalization will also let you take advantage of advanced analytics and automation capabilities. This makes it easier to review documents and contracts and ensure suppliers are meeting their commitments. Functions like APIs allow for easy data exchange, while enhanced communications strengthen collaboration across departments and with external quality partners.
If you’re looking for the perfect platform for supply chain quality & compliance management, then Topo can help. Topo is a low-code supply chain and quality management platform that lets your company adapt to changes quickly and with minimal costs. Topo empowers your business with complete control over your data and insights, letting you easily transition to a high-quality, compliant, and agile supply chain.
Talk to us today about how Topo can transform your supply chain, enhance quality & compliance management, and give you a competitive edge.