Chances are that if you’re (out)sourcing globally, your supply chain is not as responsible as you think it is. Even leaders in supply chain social responsibility still struggle with fiascos, as illustrated by The Gap, who faced child-labor allegations in India earlier this year when, without its knowledge or consent, a vendor subcontracted part of an order to an unauthorized facility that used child-labor to produce garments. Considering the impact this can have on your brand, you should be taking steps now to make sure this doesn’t happen to you.
So what should you do? Without reference to the Stanford Global Supply Chain Management Forum, as quoted in this recent Supply Chain Management Review article on Taking Supply Chain Responsibility to the Next Level, I can tell you that you need to put greater emphasis on the social side of the equation. And in addition to the models and measurement systems, you need an overall monitoring framework that will give you real-time visibility into your supply chain, and, most importantly, your suppliers.
In addition to the basic supplier performance management functions, which should include compliance status and the findings of the most recent supplier audit, this framework should also tell you which of your suppliers are actively working on your active orders, and what the status is. This will enable you to properly determine which suppliers pose the most risk, and, more importantly, which suppliers need an active (surprise) audit, and which suppliers don’t.
Furthermore, the technology should lay the foundation for trailblazers to implement structural changes within their supply management function to insure that social and environmental responsibility is considered as part of every award. It should also support the collaboration required to develop innovative products, processes, and technologies that can transform the supply chain and the business.
So how do you select the right technology? Find a technology that can support the holistic, dynamic, and flexible supply chain model that can improve your overall business performance. As highlighted in taking supply chain responsibility to the next level, leaders make the following assumptions about their supply chains.
- Social and environmental factors strongly correlate with supply chain performance
- The extended supply chain is fluid, and may not look the same tomorrow as it does today
- Getting it right is a journey, not a destination, and definitely not a sprint. It takes time to get it right, and the key to success is to get progressively better each day.
In my view, even if it’s not perfect, any technology that can allow you to integrate supply chain responsibility into your overall sourcing process is a step in the right direction. Good examples are Aravo‘s Supplier Information Management (SIM) platform that can allow you to track, report, and execute on all of the data you need to be socially responsible, EcoVadis‘ sustainable supply management solution which tracks the relevant data on your suppliers CSR practices, and SupplierSoft‘s supplier information management platform.