The Road to Transparency: Vendor Compliance

The Road to Transparency: Vendor Compliance

July 26, 2019

On July 6, 2018, the U.S. implemented its first round of China-specific tariffs on $34 billion worth of goods. Throughout the past year, trade wars sparked by the U.S. increasing tariffs on goods imported from China have thrown the fashion industry into a state of flux. The longtime sourcing hub for brands and retailers—China—is becoming less dominant due to tariffs and the ongoing trade war. Now, 83% of fashion companies say they plan to reduce their sourcing from the country, up from 67% in 2018.

As many companies seek alternative sourcing locations, ensuring vendors are compliant with various regulations regarding workplace safety, product compliance and sustainability should be a top concern. After making sure products comply with a complex mix of government regulations and varying standards depending on the product type, as discussed in our most recent blog, the next step on the road to transparency is securing vendors that comply with modern-day supply chain standards.

As Sourcing Shifts, Retailers Must Keep Vendors Accountable

Since the start of the trade war, many retailers have altered their sourcing strategies, planning and processes as they look to alternative suppliers in countries where the new U.S. import tariffs do not apply. For supply chain leaders considering exiting China, countries such as Vietnam, Bangladesh and even Mexico have become part of their sourcing plans.

While shifting some vendors to a different country is becoming necessary in some cases, finding new vendors is only the start of an extensive process that includes completing risk and financial assessments, evaluating product quality and assessing other criteria. Additionally, business ethics and quality control may suffer as a result of the trade war, and there are some indications that is already happening. In the face of such reports, proper evaluation of vendors is paramount to maintaining a transparent supply chain, which is top of mind for many consumers today.

Effective Vendor Compliance Begins With a Digitally Connected Platform

Given its importance in the midst of a changing sourcing environment, vendor compliance is a key area that highlights the need for a connected digital platform. The process is complex and multifaceted, as it involves managing multiple product lines, SKUs and vendors. It’s impossible to effectively manage vendors, especially amid the constant changes of today’s trade wars, without incorporating vendor compliance into a single enterprise platform that includes workflow calendars, collaboration and alerting. With a digital supply chain, vendor compliance is no longer a standalone part of your workflow, and the digital supply chain ensures a seamless, real-time flow of information.

Increase Your Brand’s Transparency with NGC’s Andromeda Vendor Compliance Solution

NGC’s cloud-based Andromeda Vendor Compliance puts brands and retailers on the fast track to transparency. As a complete solution for evaluating, managing and reporting on all aspects of vendor compliance, the Vendor Management solution ensures adherence to your standards of vendor engagement—from on-time deliveries to safe working conditions in factories. Ultimately, the solution can help you avoid costly litigation, reduce downstream risks and costs of non-compliance, and win market share by building and maintaining a positive public image.

As part of the Andromeda Cloud Platform®, approved vendors are included in your global sourcing strategy when allocating products in our Andromeda PLM solution. When vendors manufacture your products, their performance is monitored in the Andromeda Supply Chain and Andromeda Quality Control solutions. A Scorecard Index is generated based upon their on-time deliveries, completion rate and quality scores.

Learn more about Andromeda’s vendor management capabilities or request a demo to see the solution in action.