In today’s demanding climate, businesses face a hefty challenge: managing compliance risk in global supply chains. Beyond the technicalities of individual legal regulations—which may vary wildly across borders—logistics teams must consider environmental, social, and governance (ESG) standards, corporate directives, and more.
Companies are scrambling to stay compliant, both in terms of legalities and consumer preferences. Governments worldwide are leading the charge: Germany, for example, is set to pass legislation targeting human rights violations and destructive environmental practices. On the buyer side, demand for ethically sourced goods has soared: 83% of global consumers are now willing to pay a premium for sustainable products.
These developments are ever-evolving. In the face of unpredictable compliance risks, how can businesses emerge victorious?
A high-stakes game
Compliance risk shapes every aspect of global supply chains, from sourcing to fulfillment. Today’s most pressing challenges include:
- Legal complexities. More and more businesses are expanding into emerging markets. These high-potential opportunities—whether directly across the border or halfway around the world—come with countless legal considerations. Beyond production and manufacturing, businesses must transport supplies and finished products as efficiently as possible. This may present an especially daunting challenge amid common obstacles, such as import and export technicalities and potential bureaucratic delays.
- Digital security threats. Modern technology has advanced across the globe. As global supply chains grow increasingly reliant on digital databases—whose security levels vary by system and operational workflow—businesses must remain wary of potential compliance risk.
- Consumer demand. Global consumers want more—faster. Businesses rapidly adjust manufacturing and distribution strategies, inducting new suppliers, third-party logistics providers, and carriers into their networks. When it comes to newcomers, risk is inevitable—which means businesses must prioritize fair labor, product safety, and the environment.
Tackle compliance risk in global supply chains
Despite these challenges, businesses can stay ahead of the curve—with the right strategies and tools. Here are a few proven strategies:
- Adopt leading technology. In our increasingly digital world, businesses need technology they can trust. A transportation management system (TMS) provides real-time insight into the sourcing and movement of raw materials and finished products, along with a data-driven breakdown of carrier performance and other critical details. A TMS can also help businesses keep pace with evolving compliance standards, immediately adapting to both internal and external process changes.
- Turn to a third-party compliance specialist. Some businesses may lack the resources necessary to hire a full-fledged compliance team, or to implement relevant technology. Consulting an outside managed services provider can cost-effectively streamline day-to-day compliance.
- Conduct ongoing due diligence. While adopting new strategies and diversifying their supply chain networks, businesses must build and maintain the right partnerships. In many cases, meeting internal and legal compliance requirements is only the bare minimum—companies must also ensure their partners meet expectations concerning brand image and customer preferences.
A more intuitive compliance process
Global supply chains are riddled with unpredictable compliance risks. Navigating these challenges can be daunting: after all, a single oversight can lead to far-reaching ramifications. However, businesses everywhere can breathe a sigh of relief by reassessing their strategies.
CTSI-Global’s advanced software—such as Honeybee TMS™, our proprietary TMS—gives businesses the data-driven insights they need to overcome complex compliance hurdles. With the right tools and tactics, companies can navigate the world with newfound confidence.