As Sean observes (following a past scandal earlier in his career), "the lack of robust controls to monitor supplier performance created a negative impact on the M&S brand when news spread about the underage worker scandal." And the negative headlines continue today, as he points out, when it comes to Ikea and other retailers. Yet Sean suggests "the supply chain disconnect from CSR will not last long" and that with a "renewed focus on CSR, supplier performance and risk management" organizations are preparing themselves to reorient their supplier management processes, putting data-driven approaches first. I agree with Sean that "the only way to achieve a strong supplier information management program is to directly align existing suppliers with the company's corporate goals" which can then be incorporated into specific monitoring programs and tools and measured through a set of KPIs.
I just spoke at ISM about how many companies are prioritizing supplier management initiatives focused on compliance in a number of areas. What are the top focus areas? Here are the ones that what we see most often:
- Cross-industry CSR compliance – e.g., emissions tracking and monitoring (CO2)
- Supply chain traceability (including avoidance of "conflict" items such as conflict minerals and certification that products do not contain restricted or hazardous substances)
- Safety and quality standards
- Insurance certifications
- Individual certifications and accreditation
- Labor practices, standards, supplier codes of conduct, etc.
- Factory audits
- Government watch lists
- Requirements built on regulatory requirements and reporting
Stay tuned for another post on this subject tomorrow where we'll talk about the tactics and technology necessary to put such a program in place.