Integrity in Supply Chain Management

One of the greatest challenges to operating as a responsible business is undoubtedly supply chain management. Whilst supply chain influence and supplier standards have traditionally been recognised as a key part of any meaningful sustainability agenda, it has become an area of increased focus with legislative developments in relation to modern slavery and supply chain due diligence. 

Over the years there have been some well reported coverage of human rights abuses affecting some of the biggest brands and companies. Increasingly supplier engagement has been further prioritised as companies address the issue of climate, understanding that a significant amount of green-house gas emissions relate to the purchase of goods and services.

When it comes to supply chain management there are choices to be made, in terms of where to focus, pragmatically and meaningfully. Traditionally organisations have opted for the tier-1 supplier analysis based on spend, as the key to managing supplier monitoring and assurance. A more sophisticated overlay includes risk analysis as well as supplier self-assessments and ideally supplier audits, whether undertaken directly or through a third-party. 

Supply chain mapping and understanding the various key suppliers at specific tiers can be applied focusing on the core pathways throughout the supply chain, based on understanding an organisation's main products and services. Supply chain mapping is not however an easy exercise and requires high-levels of transparency. This is more achievable where an organisation has direct control, contractual oversight across tiers and / or the leverage of significant purchasing power. 

The burden on suppliers is also a factor. It is impossible for a supplier to respond to a myriad of bespoke customer questionnaires and audit requests. This challenge may however be overcome with legislation driving an equal playing field, for example with greater transparency and mandated disclosures, particularly around environmental and human rights issues. Collaborations such as the Ethical Trading Initiative and Fairtrade and standardised assessments, such as provided by EcoVadis, can also serve to reduce the supplier burden.

What is clear with inequalities across the world and the additional challenges of the pandemic, political instabilities and climate change, responsible business must continue to pursue excellence in supply chain management; respecting human rights, protecting reputation and driving sustainable development. Meaningful ESG assessment must also ensure that supply chain management is adequately addressed.     

Human rights abuses in retail manufacturers' global supply chains, made worse during the pandemic, need to be identified and disrupted

https://www.thomsonreuters.com/en-us/posts/international-trade-and-supply-chain/preventing-supply-chain-risk/