Supply Chain Law: JAGGAER Customers Are Ready to Fulfill Their Duties of Due Diligence

New German law provides a blueprint for a planned European Union Directive.

After a lengthy debate, Germany’s Supply Chain Law was ratified on June 25. Companies operating in Germany with more than 3,000 employees will be faced with new, extensive regulations from 2023, and those with upward of 1,000 employees from 2024. They must ensure compliance with human rights and environmental standards throughout the supply chain and must disclose how risks are dealt with full transparency. The implementation of the due diligence obligations in a company’s own operations, and the management of Tier 1 suppliers, will require the introduction of proactive risk management with regular analyses.

German lawmakers have explicitly stated that the law will form the basis for a similar legal requirement for all of Europe. Already, on March 10, the European Parliament adopted an outline proposal for the “EU Directive on Mandatory Human Rights, Environmental and Good Governance Due Diligence”. The European Commission has now been tasked with drafting a formal legislative proposal for this Directive, to be presented to the European Parliament later this year, and likely to come into force in 2023. Other EU countries, including France and the Netherlands, have already legislated on supply chain due diligence at a national level.

Companies that have not yet made progress towards digital transformation in this area will need to take urgent action in order to comply with the new legal requirements. By contrast, any company that has deployed a software solution such as JAGGAER ONE is already well prepared.

The source-to-pay vendor offers a holistic supplier management solution which, together with the integrated risk management provided by JAGGAER partners, covers all the requirements that companies will have to implement in the future with suppliers. Real-time monitoring in the risk management system enables potentially hazardous issues to be identified at an early stage. Risk-relevant data on suppliers, supply chains and locations will be automatically assessed and analyzed. These can then be seamlessly integrated into supplier management, which in turn combines all supplier information into a 360-degree view, thus guaranteeing maximum data transparency.

On the one hand, information bundled in JAGGAER on contract periods, ownership structures, purchasing volumes or dependencies on suppliers provides valuable ad hoc support in assessing the possible extent of damage, enabling customers to respond in a focused manner and counteract further violations through appropriate preventive measures. On the other, data from risk management serves as an important input to processes relating to the selection, evaluation and qualification of suppliers, while procurement decisions can always be made taking comprehensive risk profiles into account.

“We see the passage of the Supply Chain Act as a decisive step in the right direction and believe that the legal pressure will have a positive effect on companies. After all, respect for human rights should be a matter of concern for every company,” said Georg Rösch, Vice President Product Management at JAGGAER. “Supplier risk management has always been a top priority for us, and we provide our customers with targeted solutions to ensure that they can identify risks at an early stage and act proactively to prevent any damage.”

About JAGGAER: Procurement Simplified

We drive customer value for buyers and sellers through our global connected network served by offices located in the Americas, APAC, Asia and EMEA. JAGGAER develops and provides comprehensive source-to-settle SaaS-based solutions, including advanced Spend Analytics, Category Management, Supplier Management, Sourcing, Contracts, eProcurement, Invoicing, Supply Chain Management and Inventory Management. These all reside on a single platform, JAGGAER ONE. JAGGAER has pioneered spend management solutions for more than 25 years and continues to lead the innovation curve by listening to customers and stakeholders in all industry sectors, public services and academia.

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Contact

Abigail Holmes
Corporate Ink for JAGGAER
jaggaer@corporateink.com
+1 617.969.9192