The next level in the supply chain

Man in tunnel_light

It is time for supply chain professionals to shed some light on how things are made. Global economics can be a double edge sword.  It has the power to increase sales exponentially, but on the other side it has the power of to corrupt and abuse just as easily.  Business today demands companies continually look to make goods and services more cost effective or lose market share. It’s that simple in many cases.  We consumers love getting a great deal, but what’s the real cost in terms of the supply chain practices.  The fact is we know very little about those practices.

Companies that purchase goods and services have a responsibility to understand what practices are really going into their products they sell.  Due diligence in the supply chain can be daunting but worth the effort.  Languages, cultural differences, laws, business environments and many other factors play important roles in how business is awarded.  Labor practices, environmental impacts, working conditions and business practices are real concerns when awarding business to foreign companies.  Companies that profit from these arrangements have a responsibility to be aware of what they are buying.  Why is it that we consumers know more about free range cattle than free people in the supply chain?

The good news is that this awareness is beginning to ramp up.  Recent tragedies and social media are driving awareness that global supply chains won’t be able to ignore.  Unfortunately, for every abuse that has comes to light there are many more we never hear about.  The good news is there are several companies that have begun to leading the way such as Apple and Coke that have really made due diligence apart of their corporate responsibility.

Here are 5 ways to help your organization use your supply chains responsibly:

  1. It starts at the top

Executive teams must make a commitment to support fair and responsible trade throughout the entire supply chain. First level suppliers are not enough. They need to collaborate with their suppliers to go beyond just the first level and ensure all the way down to raw ingredients are made responsibly. Comprehensive policies addressing fair and responsible supplier practices need to be incorporated just like any other quality system.

  1. Transparency in the supply chain

The bottom line is that transparency creates trust.  Collaboration in the supply chain is dependent on trust.  Ensuring quality products has long been the focus for sourcing professionals but now it is time to take the supply chain to the next level and create transparent supply chains practices.

  1. Data systems

Today information is more accessible and relevant than ever before.  Organizations such Made in a Free World help put information into the hands of decision makers that award contracts to foreign suppliers.  This data is powerful and positively impacts lives across the planet.

  1. Third party inspection companies

These companies can provide on-site inspection services and can provide insight into what is taking place onsite.  They are an important part of the process as they can be your eyes when you cannot be at the supplier. It is very important to maintain they are independent from the supplier to provide objective information as to the performance of the supplier. They are beginning to provide oversight into working conditions and environmental issues.

  1. Responsible supply chain practice labels

Organic food supply has created a tremendous amount of awareness when it comes to what practices go into the food supply.  Why don’t we have that for people and the environment?  I think it is time we create labels on our packaging that let’s everyone know these products are made from a responsible supply chain practices.

Supply chains reach and impact people, countries and the environment across the world like few other disciplines.  It is our responsibility to use that influence correctly and reward those suppliers willing to offer transparency all throughout the supply chain.  We see it working with the organic food chain so it is about time we step up and make it work with people and the environment. People are worth the effort!

If you or anyone you know would like to learn more about responsible supply chain practices please email info@atssoutherncal.com for more information.

Question: Do you think adding “responsible supply chain” labels would make an impact to the end user?

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