Over the last month or so, Supply & Demand Chain Executive ran a couple of articles that had some good tips to manage demand and compliance risk.
The first article, “Supply Chain Strategies to Manage Volatile Demand”, notes that managing volatile demand in a cost effective manner can lead to significant benefits for a company but that it is a significant challenge and requires companies to employ robust supply chain strategies.
It presents four strategies to manage volatile demand efficiently:
- Supply Buffer ManagementBuffers, including inventory and capacity, are used to manage demand volatility.
- Cycle Time Reduction StrategiesCompanies with shorter cycle times can transfer information quickly and respond to changes quicker.
- Postponement StrategiesPostponement strategies such as make-to-stock (MTS) and assemble-to-order (ATO) increase flexibility.
- Collaborative ProcessesQuick responses to change require fast information flow not only within the company but also between suppliers and partners.
The second article, “12 Steps to an Effective Compliance Program”, notes that companies are obligated not to do business with illegal parties or entities, destinations, and end uses and are expected to take steps to ensure that they do not commit such violations. To this end, twelve suggestions are offered to ensure your company remains in compliance:
- Board Level CommitmentAfter all, the U.S. Government Sentencing Guidelines state that corporate officers and board members must be knowledgeable about the content of their compliance program.
- Assess ProcessesHire outside trade experts to perform a compliance gap analysis.
- Embargoed CountriesMaintain a list of embargoed countries.
- Electronically screen against black listsSelect a firm that maintains the ever-changing international restricted party lists, of which there are over 50, in a centralized solution.
- Establish an on-going screening processRemain current with list updates and modifications.
- Perform end-use and diversion risk screeningCollect end-use information from customers and parties that work with you.
- Obtain jurisdiction and classification informationPerform jurisdiction and classification when information is not easily obtained from a reliable supplier.
- Perform license determinationPerform license determination prior to each export and re-export.
- Write and implement processes and procedures for each business functionProcesses should be in place for IT, R&D, Engineering, Manufacturing, Sales, Order Entry, Fulfillment, Shipping, Finance, and Legal.
- Train, train, trainInstill compliance across the company.
- Follow ISO 9000 and Sarbanes-Oxley StandardsUse export control best practices.
- Perform Audits Every YearInsure that internal and external audits are performed at least once every two years.