As a retailer, you are dependent on the quality of your suppliers. If you are manufacturing end product items, the piece is only as good as its weakest part. If a consumer product fails, it will cost your company its reputation, but if an industrial product breaks, it can cost you money and, in the case of criminal litigation, your freedom. Consumers expect that certain standards are met when purchasing a product. It is the retailer’s job to ensure that suppliers are compliant with these standards.
Give the Heads Up
According to the United States Department of Commerce, the first element of compliance is to get commitment from management. If there is a supply chain involved, the commitment needs to come from all of the companies in the chain. By gaining executive buy-in, your company guarantees the requisite standards are understood by all of the chain’s significant providers. This places all of the merchants on notice and gives them the opportunity to price items appropriately.
Like most things in the business world, a handshake is not legally binding. A verbal agreement is as good as the paper on which it is written. Standard compliance is a contractual obligation and should be addressed as such. Make certain that there is specific legal language that binds every member of the supply chain to the standards.
Put It to the Test
When dealing with compliance issues, do not take anyone’s word on the matter; compliance needs to be approved. This is where quality assurance comes into play. Quality assurance is a testable set of standards that are implemented at a customer’s request. The definition is in the name. QA assures that the quality required by a set of standards is met using an enhanced paper trail, sample testing, or both.
For products that could put a consumer at risk, sample QA testing is performed. Often this type of testing requires that the manufacturer take a part or product and find its structural limits. This is called destructive QA testing. This form of testing can be used in textile items like plastics and clothing, as well as computer software design and electronic chip systems. As the retailer, you receive the reports verifying QA tests.
Read What Others Say
The Internet has given retailers a powerful tool to verify the quality of component parts. Compliance can be seen by the things that manufacturers and consumers put on the web. Seal manufacturer Apple Rubber uses testimonials to ensure that the entire supply chain understands their commitment to compliance to standards. In the age of the Web, much of compliance management can be performed and verified online. Testimonials, social media and consumer feedback are drawn together with cloud-based applications that give a single, robust compliance package.
There are several powerful Internet-based software packages that will let the retailer stay on top of any compliance issues they face. The review site Capterra offers a list of the best Web-based compliance software.
Compliance is not an option. The cost of ignoring compliance to standards is far greater than the cost of maintaining a solid compliance program.
This story originally appeared on the Retail Merchandiser blog. View it at blog.retail-merchandiser.com.