TL;DR

  • While essential, supplier vetting and compliance checks can take up an enormous amount of procurement’s time.
  • Outsourcing this part of the sourcing cycle to a Group Purchasing Organization (GPO), particularly for indirect categories, will reduce both time and risk.
  • GPO membership means you outsource the burden of supplier vetting.
  • GPOs like Una use strict compliance vetting frameworks and do not cut corners with due diligence.
  • At Una, we regularly re-assess our suppliers to ensure they are current and compliant from a regulatory standpoint.

“Welcome to the procurement team. I hope you like compliance!”

This isn’t what you signed up for. 

You thought this job was going to be about forging strategic relationships, conducting high-stakes negotiations, and impressing the CFO with impressive cost savings. Instead, you seem to be stuck at your desk, forever trapped at the “vetting” stage of supplier selection. 

For low-risk suppliers, this is simple enough. You validate their identity, tax details, and of course their ability to service your needs. At the medium to high-risk levels, days turn into weeks as you review contracts, verify insurance, and conduct high-level risk questionnaires. The highest-risk suppliers require deep financial reviews (with the help of experts), data privacy assessments, and detailed legal checks. Some suppliers also need physical site inspections. 

The Compliance Case for Joining a Group Purchasing Organization

There’s a better way, particularly in the indirect procurement space. Outsourcing to a GPO is a zero-cost shortcut that saves time, money, and effort, because we (the sourcing experts at your friendly GPO) remove the burden of supplier discovery, vetting, evaluation, and contract negotiation.  

Below, we explore some of the headaches of compliance and look into how a GPO membership can alleviate some of the pressure involved. 

Supply Chain Compliance

What types of compliance are you spending hours, days, and weeks assessing your suppliers on? You might be forever emailing suppliers, requesting proof of:

  • Regulatory and legal compliance like FLSA, UFLPA.
  • Health and safety (OSHA) compliance.
  • Compliance with government procurement rules. 
  • Environmental reporting and sustainability accreditation. 
  • Anti-corruption and bribery reporting compliance.
  • Cybersecurity and data privacy compliance.
  • Federal Contractor Security, if you’re working in Defense or Government. 
  • Proof of supplier diversity.
  • Code of conduct compliance and alignment with your organizational values. 

Regulatory environments can differ significantly depending on your location, industry or sector. Procurement professionals in banking and financial services have to run a compliance marathon every day (and rightly so). Healthcare is heavily regulated too, while some states (looking at you, California) have significantly more regulatory hoops than others. 

How Your GPO Can Help Improve Compliance

All of Una’s suppliers are fully vetted, meaning compliance risks are dramatically reduced for our 90,000+ member businesses. 

How exactly is the risk reduced? 

  • For a start, leading GPOs don’t cut corners. Picture a busy procurement team that’s under pressure to secure a product or service fast. They may be tempted to cut corners by skipping a compliance check, or simply by taking a supplier’s word for it when they should be demanding proof. Suddenly, they’ve put the organization at risk of breaking a law or failing a policy/regulatory check. We use a stringent compliance framework when vetting potential suppliers before signing any contract. This gives our members confidence that due diligence has been performed. 
  • Then there’s certification expiration, another bug-bear of procurement compliance. As part of our lifecycle management, we keep track of our suppliers’ compliance status, staying on top of expiration dates and ensuring we keep a database of up-to-date proof of currency. 
  • Non-compliance clauses are standard practice in every contract, which means all parties are protected if a breach occurs. 

This means that having a GPO contract can give you confidence that regulatory and contractual boxes have been ticked, with proof always available upon request.  

Supplier Relationship Management (SRM) and Compliance

Developing and managing a strong, ongoing relationship with your suppliers boosts compliance, mainly because better relationships equal more transparency.

For example, a supplier may realize that, for one reason or another, they need more time to meet a new compliance requirement or standard that your business requires. A supplier with a poor or transactional relationship may not raise this with you, leading to a headache down the track.

However, a supplier with a strong, trusted relationship is more likely to flag it early, enabling you to create a plan together to make it happen.  

supplier relationship management playbook

Reduce Compliance Risk with GPO Membership

GPOs like Una don’t set-and-forget anything when it comes to our suppliers’ regulatory compliance. We regularly review every contract and partnership to ensure our members are getting the best-possible deal, and use our vetting process to identify (early!) any issue that could lead to higher levels of regulatory/compliance risk. 

In short, our team saves you time, money, and effort, while reducing compliance risk through pre-negotiated contracts with pre-vetted suppliers.  Contact us today to find out more. 

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