Poor Enforcement Can Sink your Supply Chain

Apr 06, 2016

One of the most common reasons that a supply chain management program may fail is poor enforcement, both internally and externally. Once standards have been set, suppliers and contractors must not only know about the penalties associated with non-compliance, but also be confident that your company will enforce those penalties rather than ignoring them or treating them lightly.

In a perfect world, suppliers and contractors would understand the consequences of subpar work and non-compliance, and just the threat of action would ensure that their work is up to par. Unfortunately, this isn’t always the case, and your company should have a policy in place regarding how to deal with contractors that don’t meet company standards. 

The supply chain pre-qualification process is intended to weed out contractors and suppliers that aren’t likely to meet your company’s needs, but the process isn’t foolproof. Many times the problem is more a lack of communication between companies and suppliers than it is a problem with the specific contractor or supplier. While implementation of a pre-qualification process is essential to success, companies must do their part in setting and enforcing standards across the board.

Understanding External Enforcement

Communication is essential during every step of the supply chain management process. Before a supply chain is chosen, your company must plan and develop policies regarding how to deal with contractors and suppliers that don’t meet corporate or company standards.

In order to gain your business, suppliers and contractors must strive to become compliant with your corporate standards, but will not move to do so if they recognize that standards are not enforced within the company. There must be a system of checks and balances, beginning with simple rules that are regularly enforced. When rules are not enforced on a regular basis, they become extraneous and viewed as unimportant.

Clear, concise rules and standards are the foundation of a successful supply chain management program. Poor enforcement of these rules can be a serious hang-up in the process of completing what should have been a successful project. Contractors and suppliers must recognize that not only is compliance important for this project, but also for securing future work with your company. This is communicated when rules are enforced and expectations are set clearly from the beginning.

Internal Enforcement Is Crucial to Success

While external reinforcement highlights the importance of supplier and contractor compliance, internal enforcement focuses on awareness and training on the part of your employees. Are your employees aware of the company’s policy regarding non-compliant contractors and suppliers? If you don’t have clear, identifiable standards set in place that are commonly known to your employees, you run the risk of failure from the start.

Proper enforcement ensures that the brand and business integrity are protected. Employees, stakeholders and executives must not only buy-in to the idea of enforcement, but project that belief onto suppliers and contractors. The best way to ensure proper internal enforcement is to start from the beginning:

  • Set clearly defined standards for your suppliers and contractors
  • Train employees and stakeholders about these standards
  • Set clear rules and consequences for non-compliance when these standards are not followed
  • Communicate clearly with suppliers and contractors regarding these rules
  • Ensure that these rules are enforced on a regular basis

Rules and regulations will be different for every company – that’s why your company must set their own, along with determining which enforcements are appropriate for not complying with each individual rule. This ties in with setting appropriate standards from the beginning of the process – if everyone involved knows just what to expect, it is more likely that the project will be successful.

Rule Enforcement Must Start at the Beginning

You can’t ignore the rules for the first part of the project, and expect anyone to take them seriously when you begin to enforce them as frustrations build toward the end. Rather, you may need to be stricter in the beginning about certain rules and standards in order to ensure that your expectations are met throughout the project. Start the project strong with regularly enforced rules in order to set the tone for your suppliers and contractors. Remember that their goal is to earn your continued business, and they must know what is important to your company in order to do so.

Let BROWZ Help

At BROWZ, we take your standards and regulations, and pair you with the right suppliers and contractors to get the job done. We make the process simple by pre-qualifying your supply chains and ensuring that you are matched with those who are most likely to fit your ideal standards. Let us handle the process of supplier pre-qualification – contact us to learn more.

Poor enforcement is just one of the reasons that can lead to failure in the supply chain. View below for a full list of the 9 other ways supplier prequalification can fail.