Explanation:

Regulatory compliance refers to adherence to laws and requirements set forth by local, regional, or national governments that oversee how products are made and sold in specific regions. Regarding supply chains, regulatory compliance focuses on the actions involved in the sourcing and manufacturing of products. Regulatory compliance in the supply chain can be broadly separated into three buckets, and each affects businesses and the bottom line differently:

• Product Compliance: Products containing banned or restricted substances risk being blocked at customs, denied market entry, recalled, or rejected by institutional purchasers.
• Vendor Management: Supply chain disruptions such as regional conflict, natural disasters, or political unrest can lead to production delays and supplier insolvency.
• Corporate Social Responsibility (CSR): The discovery of unethical practices in a supply chain can reduce brand value, and lead to a competitive disadvantage and loss of investor funds.