Vendor and Supplier Compliance

Does Your Records Storage and Records Management Provider Meet Your Standards?

It started with a few customers complaining about an odor from plastic containers; it ended with wave after wave of product recalls. Hundreds of thousands of items were removed from the marketplace, costing the manufacturer nearly $1 billion. Yet the aroma didn’t emanate from the product inside the containers; it came from a compound formed from a preserving agent used on wooden pallets where the plastic containers were stored. The substance is banned in the U.S. – but not in South America, where the pallets were manufactured.

That incident underscores the risk of using suppliers that don’t prove their ability to meet or exceed the standards their clients must achieve. In records management, taking that risk can leave your organization on the hook for regulatory noncompliance — or in a courtroom facing litigation.

During the past decade, new compliance regulations and statutes have increased attention on general record keeping. Regulatory adherence, retention requirements, and litigation readiness are the focus of compliance initiatives across every industry and organization.

Not only has the activity grown, it is holistic. That is, it goes beyond what a company does in-house to include the policies and procedures of its contractors, subcontractors, and suppliers. In an interview with SmartCompliance Newsletter, medical product liability expert Sara Dyson of MedMarc Insurance Group warns companies to assess the risks of records management throughout the entire chain of the system.

“Firms without an effective records retention schedule and policy will suffer, as far too many old documents that were eligible for destruction were instead kept and are now available to the plaintiff to make his/her case,” Dyson explains. “That’s why both the initial due diligence and ongoing monitoring of suppliers is so important. You want to have a good track record of documents showing your efforts to consistently evaluate and oversee your suppliers.”

A few key steps will help ensure your business suppliers are meeting expectations:

  • Have your RIM house in order. Before setting expectations for your vendors, make sure your own systems and policies meet or exceed all regulatory and legal requirements.
  • Screen vendors thoroughly. Have a rigorous interview process. Confirm the quality of suppliers you use — and check that they do the same for the suppliers they use. You’ll want documentation and references to prove their ability to perform. Some organizations can conduct this screening with in-house resources; for those that can’t, there are outside companies that specialize in vendor screening.
  • Hold contractors and suppliers to your own high standards. You should have the same confidence in your vendors’ ability to comply as you do in your own. As Dyson notes, this will require careful assessment of suppliers both before a contract is signed and regularly thereafter, including audits and documentation. Where gaps are found, hold the outside firms responsible for correcting them, including providing a plan of action and timetable. Be especially diligent with foreign suppliers, which abide by different laws and regulations that may fall short of the rules you’re required to follow. Verify that they meet your standards consistently.

More than ever before, there can be no “passing the buck” in records management compliance and readiness. When you follow the rules, you can expect no less of your external partners, both foreign and domestic.

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Abraxas works closely with clients to ensure compliance with their unique standards. Plus, we make sure our own suppliers meet them, as well. We provide clients with tailored records and information management solutions, delivering the business intelligence that matters most — and we do it more efficiently and reliably than anyone else, particularly in highly regulated industries. To learn more, email or call us: 866.535.0016 (toll-free) or 269.226.0016.