In the US, Supply Chain CSR Moves From a Nice-to-Do to Full-Time Policing

One of the things I've been really surprised about this year has been the speed with which procurement and supply chain CSR activities are gathering steam. I honestly would have thought that recession-driven cost reduction, post bottom-point restocking and supply risk management efforts would have greatly surpassed CSR as top priorities this year. But given IBM's recent announcement (covered here and here) that its tier one suppliers are being forced to systematize how they track their green supply chain on a multi-tier level, it's not a surprise that others are not far behind. A recent post on Triple Pundit provides further evidence of recruiting the involvement of suppliers in these efforts. It also shows that supply chain CSR efforts are moving from a secondary focus to one that requires full-time supply base policing.

According to the story, "One especially prevalent theme at the LCA Sustainable Supply Chain Summit in Chicago this past week was the need for companies to communicate corporate responsibility goals to suppliers. While requiring suppliers to report on environmental metrics was uncommon, most presenters said their companies did request that suppliers fill out an environmental or social performance scorecard. In general, the consensus was that suppliers should be considered partners in reaching sustainability goals." At least partially punting on CSR and forcing suppliers to track metrics and programs follows in the footsteps of many successful supplier diversity programs that have done the same thing.

Still, when it comes to raw ingredients and core direct materials, many companies, including Cadbury (which the post provides a case study of), are maintaining active, on-the-ground involvement in CSR-focused supplier development programs. I suspect that these directs efforts -- along with mandates forcing tier one suppliers to become more aggressive in tracking and implementing CSR programs on behalf of their customers -- will go a long way to driving the adoption of automated supplier information management systems from companies like AECSoft, Aravo, Ariba, Ecovadis, Emptoris, Oracle, Rollstream and many others in the coming years. These tools can provide critical program leverage for administering both direct and multi-tier supply management programs. And some even included preconfigured templates, questionnaires and related capabilities around CSR compliance and management, specifically.

- Jason Busch

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