April 06, 2017

Successful Retailers Move Beyond Compliance—to Enterprise-wide Intelligence

By Matt Smith

Does your company have a secret treasure trove of information? Hidden away somewhere in plain sight, Raiders of the Lost Arc-style, like a precious artifact sitting in a dusty old warehouse, waiting to be discovered? 

Lots of enterprises do, and many of them are starting to use it—to pick a golden list of trading partners, to understand customer needs and desires and to respond quickly to changes in supply and demand. 

Some of the world’s most successful retailers and consumer goods companies are figuring out how to leverage information long tucked away in a place many people would never think to look: their compliance departments. 

Retailers start by dodging the stick, then go for the carrot

Nowhere has this trend been more obvious than on a recent panel discussion I led at the International Consumer Product Health and Safety Organization’s annual conference, where the speakers explained how they’re going about turning compliance information into enterprise engines that help fuel better decisions in procurement, customer service and even marketing.

For example, Jay Howell, senior director of product safety, US ethics and compliance, at Walmart, told ICPHSO participants that retailers and manufacturers are getting smarter about using this information more strategically.

“We analyze about 2.5 petabytes of data per hour,” he told ICPHSO participants. “We have a lot of data that we collected for certifications, product safety, and other requirements.” 

Walmart initially collected that information to avoid “the stick” of running afoul of laws and documentation requirements, he says. 

“But at some point, you’ve got all this data, and you start looking for the carrot. How can we use this to inform the rest of the business? We now know things we didn’t know before,” Jay says.

A growing trend: ”De-siloing” compliance, better marketing intelligence

Hanesbrands' Chris Fox says he’s seen his own company move from tracking compliance issues mostly via spreadsheet, to “niche pieces” of compliance software, to its current program to move to a more “holistic system” that can be used throughout his enterprise. The “holistic” system in this case is ICIX - and Chris shared with the audience how the investment in a “compliance” system turned into a much broader initiative with support from procurement, legal, quality control and sustainability.

Marketing, too, benefits from the trading partner and product information that comes from compliance programs—if the information resides on a platform that’s usable throughout an organization.

“The market changes radically, quickly, and at some point the data is going to start providing insights into the deeper needs of your customers.  If you can anticipate their needs, they’ll be amazed; if not, they’ll go somewhere else,” Jay says.

Speed, international operations are big carrots

Moving faster is a big motivation, too—and particularly, branching out into new markets and supporting those operations are paramount to international expansion. Being able to collect information from business units all over the world is often critical—and sometimes, the department with the most current information is, surprisingly, a compliance department.

“There is a lot of information that we collect that only exists within the anti-bribery department,” says Jennifer Bohaty-Yelle, who served as executive director for global product safety, quality and compliance during most of her eight-year tenure a Toys”R”Us.

“When other parts of the company need it, they come to us,” she says. More recently, according to Bohaty-Yelle, it’s increasingly used for procurement, quality and sourcing, as it becomes apparent which vendors offer the most value and the least risk. And that, she says, is helping the company in its international expansion, which has required a high degree of agility, precision and automation to support worldwide operations. 

“The ability to be nimble and move quickly is key to our ability to react and deal with issues internationally, and the data is important to that,” Jennifer says.

New ICIX reengineered for enterprise-wide payoffs

It’s that kind of agility and strategy that led ICIX to reengineer its previous “niche” solution, as Chris puts it, so that companies can take compliance out of its silo and bring it into the rest of the organization.

Because, as our participants point out, the rest of the organization can often leverage the information and insight from compliance departments and put it to work for them—in everything from vendor selection to marketing.

These panelists—and their successful companies—are testament that sharing information across an organization, and collaborating with outside trading partners, really is the direction business is headed.

Businesses invest too much time and effort to get this information to treat it like dusty old relics. It should be showcased, accessed and put to work earning its keep – benefitting the broader organization, pulling in new customers and helping to drive brand preference. That’s the way to flip compliance from a drag on the organization, to a lift for the whole enterprise.

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About the Author:

Matt Smith

Matt is the Founder of ICIX, where he is responsible for determining the company’s vision and cultivating strategic relationships. A recognized authority in supply chain risk management and product safety, he works with governments and advocacy groups to determine and champion industry-wide supply chain solutions.

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