2014 一月 17

Compliance vs. capability in supply chain management: how to effectively manage both.

Effective supply chain management includes understanding how to logically separate compliance and capability.

Compliance is about meeting legal and ethical requirements, and it can be a deal-breaker for the manufacturer/supplier relationship. No matter how good the positive things are about a supplier (their price, the quality of their products, etc), if they don’t comply with legal and ethical requirements, a manufacturer cannot even consider them.

Capability refers to a vendor or supplier’s ability to perform needed tasks. It’s really boils down to performance and quality. For example, a manufacturer might want to track a supplier’s capacity by product type per week or the lead time per product category.

So how do you effectively measure a supplier’s ability to achieve compliance? And what’s the most efficient way to track and rate a supplier’s capabilities?

A scoring system can help you effectively manage both your supply chain’s state of compliance and its capabilities by consolidating these measures into an overall score. A scoring system can also help you make more objective and logical decisions—balancing and weighing in a consistent way the various factors you need to consider when determining whether or not to work with a given supplier.

Read Centric’s brief article, “Compliance vs. Capability in Supply Chain Management” to learn more.