Supplier Compliance Audit Network (SCAN) Improving Supply Chain Audit Efficiencies through Collaboration

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1 Supplier Compliance Audit Network (SCAN)

2 Supplier Compliance Audit Network (SCAN) Introduction Our dependency and utilization of international suppliers and factories is growing. As globalization increases, so does risk and exposure throughout the supply chain. In a one-to-one assessment environment where a single importer conducts a supplier or factory assessment, we are putting unnecessary strain on our supply chain partners. One of the most common complaints by the international supplier base is the repetition of Supply Chain Security audits. Collectively, we are overburdening the supplier and factory base, and as an importer we can save precious resources through a shared assessment community approach. Moving to a one-to-many assessment environment is the best path forward and the purpose of the SCAN Association. The Challenge In today s marketplace, businesses are expanding their global footprint and sourcing from emerging markets. Today, the best method for understanding supplier compliance is by conducting an onsite audit to verify that business partners are implementing supply chain security policies and procedures effectively. With thousands of importers assessing facility compliance there are challenges that need addressed, such as: Supplier Audit Fatigue Inconsistent Reporting no industry accepted standard Varying Degrees of Security Compliance Requirements and Corrective Action Plans Lack of Collaboration and Sharing of Best Practices Company Resources both the supplier and importer are strained Most importers have audit programs established, and more often than not, audits are very similar in scope with little variation in questions and requirements. This high volume of similar audits has become a point of frustration for suppliers and production facilities and has resulted with additional cost of goods to the importer. SCAN will eliminate audit fatigue and by utilizing one agreed upon audit that is shared by member companies.

3 SCAN Shared Audit Concept What will the Supplier Compliance Audit Network look like? SCAN Steering Committee Standardized Security Audit Approval Committee 3 rd Party Audit Selection Committee Audit Rate Committee SCAN Member A SCAN Member B SCAN Member C 3. Unique Audit Report Unique Audit Report Unique Audit Report SCAN Audit Repository Audit Findings Supplier A Supplier B Supplier XC 1. SCAN Member or the Supplier Requests an Audit; SCAN Selects the rd Party Submits Audit Findings to the SCAN Database. 3. SCAN Members Receive or Have Access to the Audit Results with an option to Receive the Audit Report.

4 SCAN Association SCAN Board and Committees The SCAN Board of Directors oversees all aspects of the association. The Directors are committed SCAN members and are key representatives from the importer community with a vested interest in the development and success of the association. The Board has furthered the association s structure by establishing by-laws, an anti-trust statement, pricing models, audit work flows, and oversees these committees that focus on strategic objectives: Audit Criteria & 3rd Party Audit Firm Selection Audit Repository Management Member Criteria Public Relations The Board and Committee members are elected and voted into their position by association members. Elections are held every other year at the annual Fall SCAN Conference. The current Board and Committee consist of members of these companies: Walmart Stores, The Home Depot, The Coleman Company, Husky Injection Moldings, Celgene, and Boeing. SCAN Benefits SCAN will benefit corporate members and their business partners through an audit sharing network. Supplier and Facility Benefits include: Reduced audit fatigue Enable a consistent corrective action plan Minimize audit costs Establish and maintain a uniform audit standard SCAN Member Benefits include: Reduced resources dedicated to an audit program Industry accepted security criteria standard Confidential method to share audit results Search feature to locate participating facility Automated audit repository Consistent corrective action plan Automated intelligence reporting SCAN Association Fees Supplier or Production Facility Cost The supplier or production facility is responsible for the cost of the audit. The audit cost is established by SCAN based on the country where the audited facility is located. SCAN Member Fees Fees that are the responsibility of the SCAN member Fees are based on the Category of the member company: Membership Categories Executive Membership Available to a direct importer who is eligible for global authorized economic operator programs. This is a full voting rights membership Access to SCAN security audits that fall within your supply chain Associate Membership Available to transportation and logistics providers, such as a highway carrier, dray carrier, rail carrier, air carrier, freight consolidator/de-consolidator, origin manager, warehouse/ distribution center, who are eligible for a global authorized economic operator program. Voting privilege is limited to only matters submitted by the Board to a vote of the Associate Members. Access granted only to business related audits. Affiliate Membership Available to service providers who provide supply chain solutions and services such as a software company, security devices, seal manufacturer. This is a non-voting rights membership. No access to audits.

5 Annual Fees for Membership Categories: Executive Membership Fee: Tier Rate based on Volume of Audits Tier 1 Membership: Annual volume of more than 3,001 audits: $7,500 USD Tier 2 Membership: Annual volume of between 1,001 to 3,000 audits: $4,000 USD Tier 3 Membership: Annual volume of between 101 to 1,000 audits: $2,500 USD Tier 4 Membership: Annual volume of between 1 to 100 audits: $1,000 USD Associate Member Fee: Flat Rate of $4,000 USD Affiliate Member Fee: Flat Rate of $7,500 USD Annual Fees for Repository Access SCAN offers 3 access options for the shared audit repository. Each option provides member companies with different levels of management capabilities, allowing your oganization to select a package suitable for your budget and audit management requirements. SCAN Audit Repository Access included with SCAN Membership Supplier Search Functionality View Audit Report Order SCAN Audits 1 User Included ($250 per additional user) SCAN SCM Plus $12,000 per year with SCAN membership SCAN Audit Report Access Risk-based Scoring Corrective Action Plan Functionality 2 Users Included with Access ($750 per additional user) SCAN SCM Premium $18,000 per year with SCAN membership SCAN Audit Report Access Risk-Based Scoring Executive Dashboard Corrective Action Plan Functionality Global Risk Maps Supplier Plotting Risk Builder Functionality Quarterly Business Reviews 3 Users Included ($1500 per additional user) Once new members have been approved, they will be contacted by a SCAN representative to make their package selection. More information will be provided once membership is approved. SCAN Application Process Want to become a member of SCAN? 1. Complete and submit a Membership Agreement and a Membership Application. Select your company s membership category. 2. The SCAN Board of Directors will review the membership application. If approved, SCAN will provide an invoice for dues payment. An application is generally processed within two weeks of submission. 3. Make the dues payment by either check or online. 4. Select a SCAN repository access package 5. Enjoy the benefits of your new SCAN membership!

6 or visit for more information about the SCAN Association and membership.