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

IntroductionOur 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 as-

sessment environment’ is the best path forward and the purpose of the SCAN Association.

Improving Supply Chain Audit Efficiencies through Collaboration

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.

The Challenge

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

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Improving Supply Chain Audit Efficiencies through Collaboration

SCAN Shared Audit ConceptWhat will the Supplier Compliance Audit Network look like?

Unique Audit Report

Approved 3rd PartyAudit Company

Supplier A Supplier B Supplier XSupplier C

Approved 3rd PartyAudit Company

Approved 3rd PartyAudit Company

Approved 3rd PartyAudit Company

Unique Audit Report

Unique Audit Report

SCAN Steering Committee

Standardized Security Audit Approval Committee3rd Party Audit Selection Committee

Audit Rate Committee

SCANMember B

AuditFindings

SCANMember A

SCANMember C

tt

t

1. SCAN Member or the Supplier Requests an Audit; SCAN Selects the Audit Company.

2. 3rd Party Audit Company 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.

3.

2.

1.

SCAN Audit Repository

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Improving Supply Chain Audit Efficiencies through Collaboration

SCAN Board and CommitteesThe 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 BenefitsSCAN 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.

SCAN Association

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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 $3,000 USD

Affiliate Member Fee: Flat Rate of $5,000 USD

Annual Fees for Repository AccessSCAN 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!

Improving Supply Chain Audit Efficiencies through Collaboration

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Email info@scanassociation.com or visit

www.scanassociation.com for more information

about the SCAN Association and membership.