Reducing Compliance Violations through Systematic Risk Assessment during the Supplier Analysis Process

Business process compliance means to ensure that business practice and processes are aligned at relevant laws and industry standards. This means for companies to comply with an increasing number of rules of different origin and complexity. Especially purchasing activities are affected by various regulations that affect the whole supply chain. Companies then need to assure that compliance regulations are synchronized with its suppliers. In this paper, purchasing regulations are reviewed to derive risk categories that can be applied to the supplier assessment. We therefore adopt a generic supplier assessment method called SCOPE. The method is expanded by a compliance category (SCOPE-C) that refers to risks regarding disloyalty and corruption, the relationship to competitors as well as social and environmental factors and additional criteria to form a reliable supplier base. The extended SCOPE-C method can be used to assess to which extent suppliers fulfil corporate compliance policies.