Sourcing from different countries can bake resilience and cost savings into your production chain. However, with those benefits comes increased complexity, and managing compliance with different standards across your various partner countries can create a massive operational burden.
“Global supply chains are complex, diverse, fragmented, dynamic and evolving organizational structures,” writes the ILO. Beyond simple reasons like language and culture, there are strict legal, regulatory, safety, and environmental standards that vary between countries and markets. As a result, you need to map and deliver different workflows to different parts of your supply chain, all while ensuring that you can stay up to date, respond to problems in real time, and prove compliance by pointing to verifiable data.
A data-driven network platform gives brands and retailers the power to manage compliance with all standards, across supply chains of any size, all while preventing problems before they occur.
Why different standards exist across different regions
Brands and retailers working with global suppliers and markets know that different standards apply in different parts of the world. For example, all products manufactured or sold in China must meet the GB 18401 standard, while products entering Europe much conform to REACH, ZDHC, GPSD, and other standards.
There are multiple reasons for this. The first is that different countries and unions have unique laws, guidelines, and regulations, often based on that region’s own internal codes, bureaucratic protocols, and history of sourcing issues.
Similarly, different countries face different customer demands and cultural pressures. NGOs like BSCI, Sustainable Apparel Coalition, Fashion for Good and Better Cotton Initiative, and others exert influence on the public that greatly impact the presence of safety and environmental standards.
Different types of standards across regions
Ensuring the business, social, and environmental practices of your suppliers align with standards requires diligence, especially considering there are multiple standards to keep track of. These include:
The Higg Index is among the top environmental and social assessments in apparel today. Developed over the course of a decade by the Sustainable Apparel Coalition and partners, it is used by over 21,000 organizations and comprises five tools:
- Facility Environmental Module
- Facility Social & Labor Module
- Brand & Retail Module
- Materials Sustainability Index
- Product Module
The Higg Index addresses issues like carbon emissions, water usage, and labor conditions and is popular among brands, retailers, NGOs, governments, and manufacturers around the world.
The SLCP (Social & Labor Convergence Program) facilitates data sharing between parties in order to capture more accurate information and more effectively monitor working conditions in global supply chains. Many of the world’s largest brands, retailers, and manufacturers generate SLCP data.
Better Work provides a compliance assessment tool that helps adherents follow the International Core Labour Standards, which include child and forced labor, Freedom of Association and Collective Bargaining, and the National Labour Law (working time, occupational health and safety, and worker compensation and benefits).
The Social Accountability 8000 Standard (SA8000), established in 1997, is a framework that focuses on eight key areas:
- Child labor
- Forced labor
- Worker health and safety
- Freedom of Association and Right to Collective Bargaining
- Workplace discrimination
- Disciplinary practices
- Working hours
- Fair wages
- Management System
SA8000 draws on provisions within the International Labour Organization (ILO) and the Universal Declaration of Human Rights.
The Sedex Members Ethical Trade Audit (SMETA) is a widely used audit scheme that covers four pillars: environment, business ethics, health and safety, and labor rights. These include management systems, subcontracting and homeworking, and entitlement to work.
The Worldwide Responsible Accredited Production (WRAP) certification, used by over 3 million workers and 3,000 facilities around the globe, consists of 12 principles based on local and international laws and standards. WRAP audits occur every year to update each facility’s standing.
BSCI is not an accreditation system or an auditor, but rather gives companies a methodology for social auditing and reporting while providing a network of companies to perform audits. Rather than offering certification, BSCI focuses on helping companies meaningfully improve their supply chains’ working conditions. Those that excel can achieve the SA8000 certification detailed above.
The need for international standardization
Recent regulations have been enacted and new regulations are in the works that will take effect over the coming years. The EU’s Directive on Corporate Sustainability Due Diligence, the UK Modern Slavery Act, Uyghur Forced Labor Preventation Act, and other such legislative packages promise to place new and highly non-negotiable demands on brands and retailers.
For your company to maintain its reputation, expand into new markets, and avoid public scandals and expensive fines, you must take responsibility for knowing which standards apply to your supply chain and how to stay in compliance. This means adopting a scalable solution for social and environmental compliance.
What does a scalable solution look like?
Using technology to meet global standards at scale
Any solution that can handle the complexity of modern regulations must also be able to handle the complexity of today’s supply chains. When you are hunting for a technological solution, look for four main capabilities:
Sustainability and compliance expertise
Your technology partner should be experts in sustainability and regulatory compliance in their own right. At Inspectorio, we bring world-class expertise and insights to our products and our customers. This delivers unique value, as we double as an advisor in helping your company navigate new regulations and compliance challenges.
Automation of compliance requirements
When you adopt a solution that automates every possible routine or repetitive task, you not only reduce the operational burden on your workforce, but you open the door to faster time to value.
The rule of thumb is this: anything that can be automated should be. Supply chains involve many moving parts and areas that require your attention, so any task delegated to software is time saved for more valuable activities. When it comes to ensuring you’re abiding by all necessary standards, this automation saves significant time and reduces the risk of human error.
Inspectorio Rise, the most advanced and comprehensive compliance solution on the market, features robust automation of everything from Corrective and Preventive Actions (CAPAs) to audit bookings and alerts. In terms of ROI, Rise’s automation can generate a 50% reduction in manual audit reporting and up to 80% lower risk of a compliance-related public scandal.
Centralization of data
Silos are the enemy of effective compliance. Unfortunately, many digital solutions have only served to replicate them instead of removing them.
An effective digital network platform bucks this trend by bringing all activity and data under one roof. This centralization extends not only to real-time data, but also to documentation, audit activity, and all communication and collaboration. This gets rid of common problems such as duplicate efforts, lost emails or messages, and inaccessible data — all of which impede efforts toward sustainability around the globe.
Inspectorio Rise centralizes everything in your compliance ecosystem without compromise. Collaborate with all relevant stakeholders on the platform, ending the problem of missed communication and allowing everyone to reference the relevant data and analytics without leaving the app.
Predictive risk management
Moving from reactive to preventive compliance risk management requires autonomous analytics. The goal of analytics is to replace expensive teams of analysts, providing actionable insights and trend analysis using all incoming and historical data points.
When it comes to complying with different standards, Inspectorio Rise leverages powerful, artificial intelligence (AI)-driven analytics to better predict problems over time. The more historical data your compliance system collects, the more accurate and predictive your risk management becomes. AI mines data at all resolutions 24 hours a day, identifying trends and comparing different data pools to identify correlations and risks.
When a risk is identified, Inspectorio Rise alerts you so you can address it proactively. Over time, this results in the ability to stop problems before they occur by spotting them before they become problems. That translates to lower costs, less manual work, less audit fatigue, and more productive factories.
Third-party report integration and equivalency mapping
Brands and retailers often use their own mapping and scoring practices to align reporting on third-party standards with their own codes of conduct. The process of handling multiple third-party reports is time-consuming, inefficient, and leaves data vulnerable to error.
For this reason, Inspectorio Rise offers third-party Report Integration, which centralizes and standardizes all third-party reports onto one platform. You and your suppliers can simply upload approved third-party reports onto a configurable page on Rise.
Just as powerful is our Equivalency Mapping tool. Automatically map your own code of conduct to different third-party standards and extract the relevant information to generate overall scoring and CAPAs. For example, for a specific in-house code of conduct stating “All workers are guaranteed to receive legal minimum wage,” Inspectorio Rise lets you map all minimum wage-related questions across different third-party reports. Then you can simply review the integrated results for overall scoring.
Inspectorio Rise — Your complete sustainability and regulatory compliance solution
As an end-to-end network platform solution for compliance, Inspectorio Rise opens the door to complete transformation of the way your company thinks about its supply chain — including the ease with which you can handle multiple standards.
More efficient operations
Free up your teams’ schedule so they can spend less time on low-value-added tasks such as requesting information, sending reminders, and organizing data, and spend more time on valuable activities like remediation and driving sustainability goals. Use autonomously generated insights to make better sourcing and compliance decisions.
Lower non-compliance risk
Know that your operations are legally compliant for your buying and selling markets. Be able to more easily identify and resolve compliance risks.
Improve sustainability results
Achieve measurable material impact across your supply chain so you can make real, demonstrable progress toward your sustainability goals.
Inspectorio Rise helps you achieve these goals with a number of different capabilities:
- Automate manual processes
- Consolidate all tasks, data, analysis, and communication to a single platform
- Transition to predictive risk management
- Identify and resolve issues more quickly
- Standardize third-party audit reports
- Map components of your code of conduct to those of 3rd parties standards
Contact us for more information on how Inspectorio Rise makes this and other capabilities possible.