Conflict Minerals and Dodd-Frank: An Update (Part 1)

- March 14, 2012 7:03 AM
Categories: Jason Busch, Suppliers, Supply Risk |

Here at Spend Matters, we almost always take a back seat to our sister site, MetalMiner, in covering the conflict minerals issue. MetalMiner has published extensively on the subject, and you can check out a range of articles and download on the impact of conflict minerals on the extending metals supply chain here, here and here. But one area we overlap in our coverage is supplier management technologies and outsourced solutions to help manage multi-tier supply chain information. Recently, Spend Matters has continued to observe a number of companies pulling the trigger on solutions to enable other initiatives involving supplier management platforms (e.g., supplier enablement/onboarding, financial/operational risk reduction). But conflict minerals remains an area where lots of organizations are just beginning to shop for potential solutions.

Last week, I had the chance to meet with the Achilles team and we touched on the subject. Achilles is a supplier management BPO firm and solutions provider. We quickly chatted about how conflict minerals are definitely bubbling up on the radar of their customers, but most organizations are in the early days of finalizing their approach to ensuring compliance. In other words, I think we both expect a fair amount of investment to happen in the coming quarters — more so than the window shopping and research that has gone on up until now. It’s Spend Matters’ view that Achilles, Aravo, HICX, Hiperos, GXS, CVM Solutions, SAP, Oracle, Zycus and others with decent supplier management capabilities are likely to be the beneficiaries of this new-found investment.

A recent ISM/CAPs article (which we’ll feature in more detail in Part 2 of this post) captures some of the basics of the Dodd-Frank legislation, but more important, features survey data from a range of companies in the “aerospace and defense, chemical manufacturing, electrical equipment/products manufacturing, electronics manufacturing, environmental services and equipment, healthcare products, industrial manufacturing, metals and mining, and semiconductor manufacturing” industries that will have to implement solutions to deal with it. What stands out the most? When asked if they had “policies/procedures in place regarding the identification of conflict minerals used in your company’s products, or used in the manufacturing process” just 22% of respondents said yes. But for those who did not, “90 percent reported they expect to have those in place within the next 12 months.” Now that’s a serious short-term growth trend!

- Jason Busch

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