A Luxury Fashion Accessories Manufacturer Streamlines Compliance with Conflict Minerals
Company Size
1,000+
Region
- America
Country
- United States
Product
- NAVEX IRM
Tech Stack
- Integrated Risk Management
- Compliance and Audit Management
Implementation Scale
- Enterprise-wide Deployment
Impact Metrics
- Brand Awareness
- Cost Savings
Technology Category
- Application Infrastructure & Middleware - Data Exchange & Integration
Applicable Industries
- Retail
Applicable Functions
- Procurement
- Quality Assurance
Use Cases
- Regulatory Compliance Monitoring
- Supply Chain Visibility
Services
- Data Science Services
- System Integration
About The Customer
The customer is a luxury fashion accessories manufacturer and retailer. They source raw materials from around the world to manufacture their products. The company works with over 1,000 suppliers globally, making it a significant player in the luxury fashion industry. The company is subject to various regulations, including Dodd-Frank Section 1502, which requires public companies to disclose annually whether conflict minerals exist in their supply chains. If so, companies must report on due diligence efforts and conduct a private sector audit. The company's operations are complex and extensive, requiring a robust and efficient system to manage compliance and audits.
The Challenge
The luxury fashion accessories manufacturer and retailer faced a two-fold challenge. Firstly, they had to comply with Dodd-Frank Section 1502 and similar international regulations that require public companies to disclose annually whether conflict minerals exist in their supply chains. If so, companies must report on due diligence efforts and conduct a private sector audit. This was a daunting task for the company as it worked with over 1,000 suppliers around the world, making it difficult to know which, if any, were sourcing conflict minerals. The second challenge was the public pressure on organizations for transparency. Meeting compliance and audit requirements mandated by Section 1502 would cost around $3.5 million annually and take six to 12 months to complete.
The Solution
The manufacturer and retailer selected NAVEX’s governance, risk management, compliance (GRC) platform, NAVEX IRM, to bring efficiency and cost savings to its Dodd-Frank 1502 compliance effort. The company’s conflict minerals compliance program was up and running in just six weeks. One of the major 1502 compliance challenges is sending, receiving and scoring the Reasonable Country of Origin Inquiry (RCOI) survey to suppliers on their use of conflict minerals. The company’s compliance team was able to use NAVEX IRM to bulk distribute a multilingual assessment to 1,000 suppliers in minutes. Completed assessments were received and automatically scored in NAVEX IRM, which avails the team more time for risk strategy. Applying a manual assessment process to the RCOI survey, along with data collection and supplier analyses, would have cost the fashion retailer $3.5 million annually. After answers on supplier assessments are scored, any findings are singled out for remediation while high-risk suppliers are assessed more frequently. NAVEX IRM enables the company the flexibility to establish the threshold for risk beyond compliance requirements.
Operational Impact
Quantitative Benefit
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