Ethics — Yeah, Those Things — Matter with Your Suppliers

I recently came across this article in Supply and Demand Chain Executive that cites a survey showing that Global 2000 companies are not exactly doing the best job at "extending their corporate ethics and compliance programs" into their global supply chains. According to SDCEXEC’s write-up, "The September 2007 survey of 75 Global 2000 companies found that 86 percent of companies do not include suppliers in their company code of conduct, and nearly 60 percent were not sure if their company regularly assessed ethics risks in the supply chain." There's no better example of what can happen when ethics are not taken into account than The Gap's recent supplier subcontracting fiasco. Clearly, it's high time that companies begin to consider the ethics of all of their partners when it comes to contracting.

As an aside, a few other interesting tidbits from the survey caught my eye. For example, "88 percent of respondents do not maintain a Web-based portal for suppliers." Portals like this are absolutely essential to maintain current information on suppliers and to have a central repository for suppliers to share compliance, regulatory, and related information. Another statistics that caught my eye is that "56 percent of respondent companies do not audit supplier compliance with code standards." This statistic begs the question: What's the point of even having these codes in the first place if there's no way to audit or enforce them? Clearly, we all have a long way to go to when it comes to setting and enforcing compliance and ethics behavior in our supply chains.

Jason Busch

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