A few days ago, we shared our somewhat cynical response to an article in Apparel that suggested 2014 will build on the momentum of 2013 in terms of the frequency and depth of supplier audits throughout Asia. Of course procurement organizations value transparency in multiple supplier chain tiers – for a range of reasons, not the least of which is general supplier risk reduction (from multiple angles beyond just the media-friendly CSR ones). But creating lasting change requires redefining what the role of sourcing and supplier management is for procurement and supply chain organizations – and a commitment to putting visibility (in the form of spend analytics, supplier master data management and supplier management capabilities) at the heart of programs.
No doubt we agree with the enthusiasm of the statements of Sebastien Breteau, CEO of AsiaInspection, who is quoted in the article when he notes that “the common situation when a Western buying office does not know precisely where the products they purchase are manufactured and what's going on in their outsourced factories is doomed … Major names like H&M, Apple and HP have published the list for all or part of all their approved suppliers. We will see more of such initiatives with major brands taking back full control and enforcing visibility over their suppliers. Expect 2014 to be the year transparency becomes a reality in global supply chains."
Yet, to make this a permanent reality will require more than just picking up the phone and calling an audit company. There’s nothing quick about a recipe for success with supplier management. It starts with defining what will be the ultimate responsibility of category leads and operational managers rather than a dedicated risk management function (potentially within finance). Hint: there is room for both to play a significant role. And then it cascades to the use of the right technologies, partners, and even an overall supplier communication policy (not just having a code of conduct, but implementing one with teeth that are constantly grinding away.
Here’s to 2014 as the year of transparency in global supply chains. Let’s hope that more than 10 percent of the Global 2000 get there (we’re not so sure more than that will).
If you’re curious about the topic of supplier management, I would encourage you to check out our research on the topic (contact us for a one-time trial if you’re not already a Spend Matters PRO subscriber).
Here are some of the research brief titles we’ve published in recent quarters:
- Sustainability in Procurement: Prevent the Next “Bangladesh Factory Fire” From Happening Again
- Planning a Long-Term Response to the Bangladesh Factory Fire
- Sustainability in Procurement: Why Do Sweatshop Scandals Occur?
- How Do You Handle Underperforming Suppliers?
- Supplier Management Market Landscape: Detailed Slide Download!
- Supplier Management Data: 90+ Fields Finance and A/P Want Info On
- Supplier Management Data Collection: 75+ Company Level Fields
- Of Supplier Management…and Horsemeat
- Beyond Bird Flu 2.0 – Inoculate Your Supply Base Against Supply Chain Risk
- The Policy Supply Chain: Conflict Minerals and Preparing for Mandated Ethical Sourcing
- Conflict Minerals Analysis: Readiness, Technology, and Questionable Practices
- Conflict Minerals Compliance: Checklists, Templates, Planning Documents
- Conflict Minerals Q&A: SEC Enforcement, China, Scrap, and Supplier Views
- Conflict Minerals – How To Prepare Your Supply Chain (Part 1)
- Conflict Minerals – How To Prepare Your Supply Chain (Part 2)
- “Be Smart About” – Supplier Information Management Solutions (Part 1)
- Procurement Visibility and Insights – Supply Chain Transparency
- Supply Performance Management – Introduction
- Supply Performance Management: Critical For Procurement Measurement
- Re-thinking and Re-claiming “Tail Spend”
- Prime Contractors – Sensible Procurement Tool or Soft Option?
- Prime Contractors: Sensible Procurement Skill or Soft Option (Part 2)
- Offsets, Local Content, and Supplier Information Management
- Offsets, Local Content and Supplier Information Management (Part 2)
- Direct Material Sourcing and Supplier Management Platforms (Part 1)
- Direct Material Sourcing and Supplier Management Platforms (Part 2)
- Can Supplier Management Be Saved? The Problems With SIM, SRM and Risk Management (Part 1)
- Can Supplier Management Be Saved? The Problems With SIM, SRM and Risk Management (Part 2)
- Global Supplier Intelligence: A Bureau van Dijk Review
- RollStream (GXS): Supplier Management Prospect, Customer and Competitive Recommendations and Analysis
- LockPath – A Hybrid GRC and SPM Approach to Conflict Minerals (Part 1)
- LockPath – Taking a Hybrid GRC and SPM Approach to Conflict Minerals (Part 2)
- HICX Solutions: Supplier Management Meets Master Data (Part 1)
- HICX Solutions: Supplier Management Meets Master Data (Part 2)
- Cortera – Looking at Supply Chain Risk Through the A/R Lens
- NMSDC Consolidation – Breaking News Around the True Story!
- NMSDC’s Recent Supplier Diversity Conference: Firms to Watch Out For
- Overcoming Supplier Diversity Capacity Challenges – When Suppliers are Too Small (Part 1)
- Supplier Diversity Meets Supply Management: A Roadmap for Success (Part 1)
- Supplier Diversity Meets Supply Management: A Roadmap for Success (Part 2)
- Supplier Diversity Meets Supply Management: A Roadmap for Success (Part 3)
- Supplier Diversity Meets Supply Management: A Roadmap for Success (Part 4)
- Supplier Diversity – Creating Shared Value for the Future of the Nation (Part 1)
- Supplier Diversity – Creating Shared Value for the Future of the Nation (Part 2)
- Advanced Supplier Diversity: Addressing the Real Legacy of Triumph