Compli… What now?
Wikipedia describes Compliance as “Conforming to a rule, such as a specification, policy, standard or law. Regulatory compliance describes the goal that organizations aspire to achieve in their efforts to ensure that they are aware of and take steps to comply with relevant laws, policies, and regulations. Due to the increasing number of regulations and need for operational transparency, organizations are increasingly adopting the use of consolidated and harmonized sets of compliance controls. This approach is used to ensure that all necessary governance requirements can be met without the unnecessary duplication of effort and activity from resources.”
At factory level, there are different types of compliance. More and more brands will ask their factories to be socially, environmentally and C-TPAT (The Customs-Trade Partnership Against Terrorism) compliant.
For factories to be socially compliant, 9 requirements need to be met. Those are specified by the SA8000 Standard, one of the world’s leading social standards used for measuring social compliance and implementing international labor standards. The 9 SA8000 social compliance requirements are:
- Child labor: No children younger than 15 years of age may be employed by a factory.
- Forced labor: No person may be employed by a factory if they haven’t offered to do so voluntarily or be forced to work under the threat of punishment or retaliation.
- Health and safety: A safe and healthy workplace environment must be provided by the factory who should also prevent any potential health and safety incidents and work-related injury or illness from occurring.
- Freedom of association and collective bargaining: All staff have the right to form, join and organize trade unions and to bargain collectively on their behalf.
- Discrimination: A factory is prohibited from engaging in discrimination in hiring, remuneration, access to training, promotion, termination or retirement.
- Disciplinary practices: A factory is prohibited from engaging in or tolerating the use of corporal punishment, mental or physical coercion or verbal abuse of employees.
- Working hours: A factory must comply with applicable laws, collective bargaining agreements and industry standards on working hours, breaks and public holidays.
- Remuneration: The right of staff to a living wage must be respected by the factory.
- Management systems: Compliance must be reviewed and implemented to the SA800 Standard through developed policies and procedures.
Pivot88’s history with compliance
As with the product quality part of the Pivot88 platform, the compliance module was born out of personal experience of Pivot88’s founder. As a supply chain expert, Stephane Boivin knows the challenges that exist at factory level and saw the need for more transparency.
Pivot88 decided to put together that knowledge and started working on a new module to integrate in their existing quality platform. One of their clients was immediately convinced and the compliance module went live in the summer of 2018. Since then, many other clients have followed.
The benefits of compliance software
Why is compliance becoming more and more important? It started with the consumer. They are beginning to ask more questions about what they buy and the brands that produce it. In turn, brands must step up their ethical credentials and work with their factories to achieve those requirements. That’s why many brands are implementing policies to transform their business processes and organizing audits at their factories. And they are witnessing a bonus uplift in consumer loyalty as a result.
But why should it be digitized? First of all, digitizing the audits simplifies the process. It allows you to easily book audit inspections; it eliminates paper and back and forth emailing; and it keeps track of all the audits done in the past. That brings us to the second benefit: Data. Data allows you to evaluate and take action faster and more easily than ever before. On top of that, it enables you to assess your risks and make decisions based on facts instead of intuition. Pivot88 can help brands and factories achieve that supply chain transparency, and in addition offers the possibility to fully customize the audit reports so that every client can focus on what’s most important to them.