In looking forward to better address its current approaches, Nike observes in its recent interview with GreenBiz that new solutions will be key to taking efforts and performance to the next level. Nike notes specifically, "what we need is...solutions. We need new technology and new chemistry, new materials, to swap out with the old. So there is an innovation challenge and it's really about sending a signal to innovators in the company and outside the company, that we are in the hunt for alternatives." While there is no doubt that supplier-based technologies and new materials will play a role in environmental and CSR compliance, there's another important angle to Nike's focus as well -- the automation and management of suppliers through new technologies.
At the Forrester Sourcing and Vendor Management summit a while ago, I gave a keynote address that explored, in part, the various technology approaches to managing suppliers, including providing a segmented list of the types and categories of offerings available today. Yet in general, the value proposition for supplier management tools to manage CSR and other compliance areas is pretty cut and dry. Specifically, I suggested that such technologies:
- Do more with less – focus limited resources on areas that count
- Create audit trails
- Move from reactive to predictive in your supplier management initiatives
- Analyze more of your supply base, not just a small subset (and tier suppliers as needed)
- Enable supply managers to plan for and manage performance problems and disruptions in the supply chain
- Automate the collection of supplier risk and performance information to help prevent or avoid problems and also enables a timely response as unavoidable incidents occur
- Enable access to more information than most firms typically have available within their own four walls
Most organizations use supplier management technologies to support (and sometimes fundamentally enable) a range of specific initiatives. These often include managing:
- Supply chain traceability (often multi-tier) including the avoidance of "conflict" items such as conflict minerals as well as certifying that products do not contain restricted or hazardous substances
- Safety and quality standards
- Insurance certifications
- Individual contractor/consultant-level certifications and accreditations
- Cross-industry corporate, social responsibility (CSR) compliance – e.g., emissions tracking and monitoring (CO2)
- Ongoing supplier performance mgmt. (SPM)
- Labor practices, standards, supplier codes of conduct, etc.
- Factory audits
- Government watch lists
- Requirements built on regulatory requirements and reporting
As we conclude our series, we'll share specific approaches to using technology to drive these initiatives.