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March 2013

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Oracle Enables Improved Scrutiny on Materials Sourcing and Reporting

Supply chain professionals are facing important new regulations this year that require them to scrutinize more closely than ever the materials they procure and where those resources are sourced.

Some of the changes result from the Dodd-Frank Act, which puts restrictions on so-called “conflict minerals” from the Democratic Republic of the Congo. As Oracle’s Stephen Slade points out in a recent blog, gold, tantalum, tin, tungsten, and other metals have been linked to violence in the area. As of 2014, manufacturers will need to formally report sourcing of conflict minerals.

In related news, public companies now must report business dealings with Iran to US officials, even if transactions are done by affiliates of the companies. This puts new pressures on organizations to document and report activities throughout their entire supply chain.

“The trend is for businesses to be increasingly careful about who they do business with and to take greater responsibility for who their trading partners are,” says Jon Chorley, Oracle chief sustainability officer and vice president, supply chain management product strategy.

One key to successfully meeting these obligations is mechanisms within transaction systems that automatically block or flag actions that may be subject to restrictions. For example, Oracle Global Trade Management acts as a centralized trade data repository for all legal, regulatory, and compliance information. It offers visibility and control over end-to-end trade processes and enables companies to perform compliance screening.

To protect against risks associated with conflict minerals, organizations need systems that enforce relevant rules during both the product design and manufacturing process, Chorley adds. Oracle’s Agile Product Lifecycle Management governance and compliance solution helps companies avoid hazardous materials and conflict minerals during the design process. Oracle Procurement solutions offer tools for checking and validating the supplier base and determining whether individual suppliers are complying with relevant legislation.

“The key is to have solutions such as Oracle’s that can be embedded natively into a company’s standard business process—from product design to procurement and order fulfillment,” Chorley says.

He adds that compliance solutions must also be flexible and easy to update. “Your solution needs to be driven by rules and data, and the application must be constructed around the idea that laws and regulations are fluid,” Chorley says.

Get more information about Oracle compliance and sourcing solutions, including Oracle Advanced Procurement.

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