You would think that complying with existing laws and regulations would be top of mind for businesses and a host of other sectors who want to continue operating. However, you’d be surprised at how many seem to not know the importance of compliance in business.
With more and more businesses expanding worldwide, compliance management must expand along with it. Global compliance is definitely not something to be dismissive about as regulatory issues in business often lead to heavy fines and even closures. As emphasized by the Companies (Auditor’s Report) Order (CARO) 2020. According to CARO 2020, zero tolerance of non-compliance is something the business world is moving towards, with auditors now required to report anything fraudulent that they witness or notice in a company. Speaking to CFO.com, chartered accountant Sanjay Vasudeva said that the business environment “seems to be moving towards a direction of zero tolerance of non-compliance, financial indiscretion by companies, and very stringent regulation.”
Following these stringent regulations can only mean good things for a company or a business. The benefits of having a compliance management software include avoiding closure and sanctions. Other benefits include:
- Increased supply chain transparency
- Mapping supply chain risk
- Staying up to date with all policy changes and addendums
- Drastically reduced time spent in-house with compliance reporting
At Source Intelligence, our AI-powered software gathers and validates supply chain data for over 50 global regulations and curates reports to show due diligence.
Compliance Management Software Sectors
Compliance management software is becoming more and more indispensable. Even though any company that utilizes a global supply chain reaps incredible benefits from compliance programs, here are 5 sectors that have been increasingly regulated.
The world of lipgloss, lipstick, and eyeshadow might not be the first sector that comes to mind, but this billion-dollar industry has to pass through a lot of laws and regulations before they can sell their products anywhere.
Take, for instance, what cosmetic companies need to know if they intend to sell their products in the European Union (EU). There are a lot of differences between what the United States asks of cosmetic companies compared to the EU, foremost of which is the amount of chemicals banned for use in cosmetics. The United States has only banned 30 chemicals in cosmetics, whereas the EU has banned a total of 1,300 chemicals. The EU also has a process companies must go through before they get authorization.
Mica is often added to cosmetics to add shimmer to eyeshadows and highlighters but more and more human trafficking and modern-day slavery cases are being uncovered in mica supply chains. Non-compliance with human trafficking laws could result in hefty fines.
To ensure that they comply with all these regulations, companies have to handle a large amount of documents that could be overwhelming. Using a compliance management system automates everything and ensures that nothing is missed.
2. Fashion and Apparel
When a fashion brand is revealed to have made their clothes in a Third World sweatshop, it is always a big story and with good reason. News of it is bad for any brand, resulting in bad publicity that often hounds it for several years. What is asked of clothing companies now is to become fair trade, which is defined as “trade between companies in developed countries and producers in developing countries in which fair prices are paid to the producers.”
A brand revealing itself to be fair trade is often met with acclaim, as it means that the brand works to empower workers, helps with a country’s economic development, and is socially responsible. Brands looking to meet fair trade requirements often have to engage in on-site factory audits that look at areas that include labor, facility safety, ethical sourcing, product quality, and more. It also includes complex self-assessments, which companies can stay on top of with the help of compliance management software.
Since it deals with the lives of people, it is no wonder that the healthcare industry is governed by so many regulations. There are regulations on patient information and the technology used to keep it secure. Hardware failure and data breaches are just some of the issues that they have to contend with. On top of that are the requirements healthcare providers need to meet as mandated by the Health Insurance Portability and Accountability Act (HIPAA). So that they avoid closure and hefty fines, healthcare providers can look to compliance management software to ensure that all the requirements are being met.
The EU regulates medical devices and pharmaceuticals with a constantly evolving set of requirements divided up into different programs:
- SCIP Database
- EU MDR
A compliance management software automates data collection and prepares dossiers for submission to each of these programs to ensure you stay compliant.
Money is always a sensitive topic and even more so when you’re handling amounts in the billions. Regulations abound in the financial industry to make sure that all of that money is kept safe, especially since it is tempting to commit fraud when you’re handling that much money. With the proper software, financial institutions can ensure that they can comply with the regulations required of them.
5. Aerospace and Defense
There are a number of regulations that govern aerospace and defense supply chains and, concerning almost every aspect from materials sourcing to production. Failure to comply with them can result in stiff penalties and legal trouble. Since these regulations are far-reaching and complicated, having compliance management software enables these companies to keep track of where they may be lacking and ensure that regulatory compliance is met.
A new regulation coming to the forefront of the defense sector is the Cybersecurity Maturity Model Certification (CMMC). This requires a third-party compliance program like Source Intelligence to monitor and assess how well supply chain cybersecurity measures meet CMMC requirements.
Software That Ensures Compliance
There is no doubt that compliance is now more important than ever, and you can’t blame businesses who want to experience the benefits of a compliance management system by looking for the software that works best for them. Check out reviews like this analysis from FinancesOnline to be sure that you’re making the right decision.
Our award-winning platform provides users with a single location where they can engage with suppliers, collect data and documents, as well as provide compliance reporting in real-time.
Source Intelligence also reviews and verifies the required documents suppliers submit, which is not a small thing to accomplish since documents required for compliance often number in the thousands. Finally, we also track the progress of programs and provide analysis and reports so that you know how well you are doing with regards to compliance and if there is heightened risk in your supply chain that needs to be addressed.
With compliance management software like Source intelligence working for you, meeting global regulatory requirements and avoiding penalties is easy. Click the button below to get a tour of what our compliance platform can do for you!