Why Turn To Artificial Intelligence To Monitor Your Supply Chain Compliance? Posted on : Apr 18 - 2019

Historically, buying organizations have mandated that vendors comply with specific supply chain rules in order to coordinate processes, avoid supply chain failures and maintain consistency in order fulfillment and delivery timelines.

Some of these compliance rules required vendors to invest in automation that would streamline the supply chain process, increase operational flexibility, enhance collaboration and ensure scalability. Without automation, there’s an increased risk of operational disruption, which could lead to diminished profit margins.

Having spent the past 20 years as the co-founder of DiCentral, a leading provider of technology solutions that help businesses streamline and improve the productivity of their supply chains, I've seen just how complex those supply chains have become over the past decade due to the rapid rate of increase in supply-chain globalization.

Modern Supply Chains Are No Longer Vertically Integrated

Most companies have done away with vertically integrated supply chains, which typically require companies to take in raw material and have several cycles of manufacturing to create a finished product. Today, companies are more integrated with their suppliers/vendors to source sub-components that, in turn, are integrated or assembled into the final product.

This enhanced reliance on sub-component suppliers requires the supplier to agree to strict compliance requirements defined in routing guides. These requirements can be increasingly complex and even result in fines, which are commonly referred to as chargebacks or quality deductions.

Chargebacks can be imposed on late shipments, incorrectly labeled shipments, incorrectly packing the shipment, sending substitute products, short shipping, sending incorrect or late electronic signals associated with the shipment of goods, using the wrong transportation company to ship the products and the list goes on. These business rules and associated fines are designed to encourage the vendor to more tightly integrate to their retailer customers’ processes.

For suppliers, these business rules can be challenging to manage, given that each buying organization might have, on average, hundreds of unique business rules. A supplier with 50 customers might have 5,000 unique business rules to manage. View More