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Compliance management for logistics and supply chain can imply managing internal compliance procedures as well as regulatory compliances set up by the Government of India. Compliance management in logistics helps with smooth transport of products and accurate filing of GST.
Internal compliance management for logistics and supply chain
Internal compliance for logistics and supply chain in a company refers to the set of policies, procedures, and practices that an organization establishes and enforces to ensure that its operations in the logistics and supply chain functions adhere to relevant laws, regulations, industry standards, and internal guidelines. It is essential for maintaining efficiency, reducing risks, and upholding ethical standards in these critical business areas. This also improves the cost efficiency of logistics processes.
The internal compliance activities stem from procedures set in place for effective functioning of supply chain and logistics. For example, there will be certain rules for handling of products, checking the quality of the products and raw materials obtained, coordinating with the delivery partners, marking processed orders, updating the status of orders processed and delivered, etc.
Here are some key aspects of internal compliance for logistics and supply chain:
- Quality standards
Adhering to quality control standards and certifications such as ISO, BIS, or other industry-specific quality measures to ensure products and services within the supply chain are consistent in quality.
- Inventory management
Inventory management deals with managing stock levels, demand forecasting, and optimising warehousing. This helps minimise stockouts, overstocking, and unnecessary costs.
- Regulatory compliance
Movement of goods must comply with local, national, and international regulations and laws related to transportation, import/export, environmental standards, safety, etc. This includes compliance with customs regulations, trade sanctions, hazardous materials handling, and transportation safety standards.
- Security measures
Logistics chains around the country are susceptible to theft, fraud and other malpractice. Implementing security measures to protect against theft, fraud, and other security threats to goods within the supply chain including tracking systems, surveillance, and physical security measures is also an internal compliance measure.
External compliance is a part of internal compliance but deals with following the logistics and transport regulations in India set up by the government. Companies must diligently follow these regulatory measures to legally transport their goods. Have a look at a few logistics rules mandated by the Government of India:
- National permit/All India permit
A national permit is a document issued by the transport authority to indicate that a commercial vehicle is authorised for goods carriage across the country. State governments can issue two different permits for goods carriage: state permits and national permits.
- e-Way bill
The e-Way bill system was implemented from 1 April 2018. Transporters carrying goods by road must possess an e-Way Bill authorising the movement of goods from one place to another. This bill is generated by the supplier of the goods or by the transporter himself before the movement of the goods on the e-Way bill portal. It is compulsory if the value of goods being moved is more than ₹50000.
- Commercial vehicle registration
According to the Carriage by Road Act of 2007, a carriage owner who has started carrying goods on his vehicles must apply for a commercial vehicle registration within ninety days from the date of commencement.
- Shipping bill
Shipping bill is mandated by the Shipping Bill and Bill of Export (Forms) Regulations, 2019. This document must be submitted by the exporter to the customs officer before exporting goods via land or sea to legally export goods.
There are few other logistics rules and regulations set up by the Government of India as well.
Streamlining compliance management for logistics and supply chain
Planning helps to streamline supply chain management. Devising a step-by-step strategy for compliance management can help finish compliance goals in time and make sure your entire supply chain conforms to regulations.
Here are steps you can take to streamline compliance management to meet all regulatory requirements and internal standards efficiently:
- Draft a compliance policy that mentions all relevant regulations, standards, and internal guidelines.
- Appoint a compliance officer to handle compliance in logistics and supply chain operations.
- Establish real-time visibility and tracking systems for shipments and inventory.
- Utilise technology and software solutions to automate compliance processes. This can include automated shipment tracking, automated inventory management and data storage.
- Use a centralised data management system, like digital document management systems, to store and access compliance-related data and documentation easily.
- Create a reporting system that tracks and reports compliance metrics and key performance indicators. This can help monitor adherence to compliance measures.
- Conduct regular audits and assessments of your logistics and supply chain processes to resolve problems and identify areas for improvement.
- Develop open communication and collaboration between different departments involved in the supply chain to ensure everyone is aligned with compliance requirements.
- Stay up to date with changes in laws and regulations related to logistics and supply chain and change your compliance policies accordingly. Also maintaining a robust relationship with relevant regulatory bodies can ensure a good understanding of their requirements and to stay informed about changes or updates.
- Ensure that employees engaged in logistics and supply chain operations receive regular training on compliance requirements and best practices.
Compliance management for logistics and supply chain is critical for an organisation’s reputation, legal protection, and overall efficiency. Many companies have officers appointed for compliance management for logistics and supply chain or teams responsible for overseeing and ensuring adherence to these policies and practices. This helps to build trust with customers, suppliers, and regulatory bodies while minimising the risk of costly disruptions and legal issues.