What is supplier compliance and why does it matter?




Many business operations rely heavily on suppliers for goods and services to keep running. Suppliers range from raw material providers, manufacturers, service providers, office suppliers, e.t.c. An organization can have tens to thousands of suppliers. Proper supplier management ensures mission-critical functions keep running.


Supplier compliance should cover the statutory, legal, and technical requirements of your business.

Benefits of vendor compliance

  • It helps reduce time wastage, lower warehouse, freight, and delivery costs, increase speed and accuracy, and improve customer service and satisfaction.

  • Acts as a cushion against unplanned price increases, late deliveries, dissatisfactory products, and legal non-compliance.


Secrets to maintaining supplier compliance

  • Proper vetting and verification before engaging.

  • Initial and annual surveys to update information on record.


Supplier surveys should include both federal and state legal requirements to ensure that the data collected covers all legal frameworks. Surveys are industry specific, for example in healthcare, policies such as GDPR and the CCPA, and HIPAA need to be covered, and for automotive, attributes such as the California Cobalt Emissions regulations are necessary..


Essentially, you want the parties you rely on to be up to the same legal, cybersecurity, and human rights standards that you maintain for your business. This includes primarily two areas:

For organizations with a few suppliers, it is cost-effective to email the questionnaire and have suppliers fill and send it back for record keeping. However, supplier compliance management gets complex as the number of suppliers increases. In such cases, professionally prepared questionnaires such as those developed by Cloudsyte can help cut down on time spent while making sure that all relevant areas are covered. Furthermore, the data analysis methods can easily identify risk exposures associated with specific suppliers.


Ensure that vendors are accountable for their services, products, and mistakes, that alone will save you a lot of time and headache.
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