How risk management and compliance can guarantee resilience in the supply chain
In the first article of this series, we emphasised the importance of transparency as a vital component of efficient and trustworthy CNC part procurement from drawings. Transparent processes improve communication between buyers and suppliers and contribute significantly to supply chain optimisation. > Read the first article in the series here: "Transparency as a Key Factor".
In the second article, we focus on two further essential aspects: risk management and compliance. In an increasingly globalised and regulated world, transparency in the supply chain is vital for minimising risks and meeting regulatory obligations.
Resilience in global supply chains and regulatory pressure
Globalisation has made supply chains in the European manufacturing industry more complex. Technical buyers now work with suppliers from a variety of countries, introducing numerous external risks into the procurement of CNC parts from drawings.
External risk factors for manufacturing companies:
Geopolitical tensions and trade conflicts
Natural disasters and climate events
Economic instability and currency fluctuations
Raw material shortages and bottlenecks
Cyber-attacks on critical infrastructure
At the same time, companies are under increasing pressure to meet strict compliance requirements. The German Supply Chain Due Diligence Act (LkSG) and the upcoming EU Corporate Sustainability Due Diligence Directive (CSDDD) require companies to implement human rights and environmental due diligence obligations throughout their global supply chains.
In this context, resilience is becoming a key strategic objective for technical buyers. A resilient supply chain can respond flexibly to unexpected disruptions and recover quickly, minimising the negative impact on production and business.
Minimising risk through transparent supplier networks
Transparency in the supply chain is an indispensable tool for technical buyers to minimise risks and strengthen the resilience of their company. Technologies such as the Internet of Things (IoT) and real-time data monitoring make it possible to continuously monitor supplier networks.
Real-time monitoring of production capacities
Monitoring supplier production and delivery capacities provides significant benefits for managing bottlenecks. If a supplier encounters issues such as machinery breakdowns or delivery bottlenecks, the technical buyer can be informed immediately.
Benefits of real-time monitoring:
Early detection of production disruptions
Proactive contact with alternative suppliers
Adjustment of production planning before critical failures
Avoidance of production downtime and high costs
Continuous supplier evaluation and performance monitoring
Transparent supply chains allow technical buyers to regularly assess their suppliers on the basis of quality, punctuality and sustainability. These systematic evaluations minimise risk, help make informed decisions and optimise long-term cooperation.
Suppliers that openly disclose information relating to their production processes, certifications and potential risks establish a foundation of trust on which stable partnerships can be built. Transparency significantly improves the ability to proactively manage risks.
Evaluation criteria for suppliers:
Quality metrics and rejection rates
Delivery reliability and flexibility
Certification status (ISO 9001, ISO 14001, ISO 45001)
Financial stability and creditworthiness
Sustainability practices and ESG compliance
Compliance and sustainability in procurement
Besides minimising risk, transparency also plays a key role for technical buyers in ensuring compliance with legal requirements. Regulations such as the LkSG require companies to review their supply chains with regard to human rights, working conditions, and environmental protection.
Traceability of materials and products
Transparent supply chains enable technical buyers to ensure the complete traceability of materials and CNC parts from drawings. They can track where the materials come from, the conditions under which they were obtained and the production steps they have undergone at any time.
This is particularly important in regulated industries, where maximum precision and quality are essential. Documenting the entire value chain can give companies a decisive competitive advantage.
Implementation of sustainability goals
Companies that openly and transparently disclose their supply chains can more effectively enforce and document their environmental and social standards. Technical buyers can verify that all raw materials originate from sustainable sources and are produced under fair working conditions.
Sustainability criteria in procurement:
Suppliers' carbon footprint
Energy efficiency of production processes
Recyclability of materials
Social standards and working conditions
Environmental management systems
Transparency builds trust among customers and minimises the risk of legal issues or damage to a business's reputation. Transparent processes make it much easier to monitor compliance with environmental regulations, such as emission limits or energy efficiency standards.
Digital platforms support compliance
Techpilot help technical buyers to achieve the necessary transparency and control over their supply chains. These platforms provide a central interface where buyers can access detailed supplier information.
Key features of digital procurement platforms:
Central supplier database with certifications
Historical performance data and evaluations
Real-time monitoring of production capacities
Automated compliance checks
Documentation for audit purposes
One particularly useful feature is support for compliance with regulations such as the LkSG. The platform makes it easier for technical buyers to gather the necessary information and regularly evaluate their suppliers.
Promoting sustainable procurement strategies
Digital platforms offer transparency, enabling companies to ensure that their suppliers adhere to sustainable practices and can prove this with appropriate certifications. This helps companies to meet legal requirements and strengthens customer confidence in the supply chain.
The future: Long-term partnerships and innovation
Transparency in the supply chain contributes to risk minimisation and compliance with regulations and also promotes the development of long-term partnerships with suppliers. In the third and final article in this series, we will explore how transparency can enhance collaboration between companies and suppliers, driving innovation within the supply chain.
FAQ - Frequently asked questions regarding risk management and compliance
What does resilience represent in the context of the supply chain?
Resilience is the ability of a supply chain to respond flexibly to unexpected disruptions and recover quickly without experiencing significant negative impacts on production or business. Resilient supply chains are characterised by redundancies, alternative sources of supply, and the ability to adapt quickly.
What is the Supply Chain Due Diligence Act (LkSG)?
The LkSG is a German law that requires companies above a certain size to implement human rights and environmental due diligence in their global supply chains. Companies must verify that their suppliers comply with labour rights, environmental standards, and human rights.
How does real-time monitoring work in procurement?
Real-time monitoring uses digital technologies, such as IoT sensors and data analysis, to continuously collect information relating to suppliers. Technical buyers receive direct notifications about production disruptions, quality issues, and delivery delays, enabling them to respond proactively.
What does traceability mean in the supply chain?
Traceability refers to the ability to document and track the origin, processing and path of materials and products throughout the entire supply chain. This is particularly important for compliance and quality assurance requirements.
What role do digital platforms play in compliance management?
Digital procurement platforms centralise supplier data, automate compliance checks and enable the continuous monitoring of sustainability and quality standards. They support technical buyers in meeting legal requirements and minimising risk.
What are the main risk factors in global supply chains?
The main risks include geopolitical tensions, natural disasters, economic instability, shortages of raw materials, cyber-attacks and changes in regulation. Technical buyers must systematically identify these risks and minimise their impact through appropriate measures.
Would you like to learn more about transparent and resilient procurement strategies? > Read the third article in the series on long-term partnerships and innovation in the supply chain.
