Conflict Minerals: Taking A Supplier-Centric Approach to Compliance

This post is based on excerpts from the MetalMiner (part of the Spend Matters Network) paper: The Definitive Guide to Conflict Minerals Compliance for Manufacturers: An A–Z Guide to Conflict Minerals and Semi-Finished Metals.

A supplier-centric approach to conflict minerals compliance involves the use of the sorts of sourcing surveys or tools (such as the EICC-GeSI template) that are provided to all or a portion of an OEM’s supply base. When we say OEM, we include any publicly traded company that may have to comply with the regulations/legislation. The OEM’s approach might involve examining “all suppliers that supply us with metal and/or electronics” and demanding that the supplier complete a survey. We know of one company that deployed this type of approach and received a 40% completion response rate.

The supplier-centric approach might make logical sense for companies with tens of thousands of purchased SKUs or parts, as one supplier-wide declaration may cover hundreds or thousands of individual parts. Yet this approach remains risky. Buying organizations must understand the nature and scope of supplier-wide declarations.

For instance, one capacitor manufacturer (named in the paper) guarantees that all their tantalum capacitors come from conflict-free tantalum powder. However, that may not provide truly complete assurance that their capacitors in their entirety remain conflict-free because capacitors also use tin in the leads (even surface-mount packages use tin termination plating).

Another thorny issue OEMs currently grapple with involves invisible tiers of the supply chain that result from Tier 1 suppliers subcontracting to Tier 2s and so forth. It makes it difficult to send a survey to an unknown company! Most OEMs will likely follow industry guidelines, so suppliers see consistent formats for survey information.

When does a supplier-centric approach make sense? Download the full analysis from Spend Matters Network site MetalMiner today: The Definitive Guide to Conflict Minerals Compliance for Manufacturers: An A–Z Guide to Conflict Minerals and Semi-Finished Metals.

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