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New Year Insights for the procurement solutions and services marketplace 2024: FRDM

01/29/2024 By


For several years now, Spend Matters has been collecting and publishing a series of articles about procurement, supply and services trends for the year ahead from expert tech and service providers in the market.

Our series runs from mid-December to end-January, then our senior analysts will wrap up with their own take on the key themes that emerge.

In no order of preference, today let’s hear from Justin Dillon, CEO of supply chain risk management solution provider, FRDM, one of Spend Matters 50 Procurement Providers to Watch.

It’s time for procurement to lead the supply chain transparency movement

January is Human Trafficking Awareness Month in the United States and it’s never been more relevant to supply chain and procurement professionals. For over ten years countries have quietly passed supply chain regulations prohibiting forced and child labor. This year new laws have come with the heaviest enforcement and severity to date, requiring corporate engagement beyond policies and spot audits

I was fortunate to play a small role in helping the first supply chain act get passed in California and have since helped companies comply with modern slavery laws in the US, UK, Europe and Australia. Each new law passed came with increased severity. In the past two years alone the United States Customs and Border Protection seized approximately $2 billion worth of goods suspected to be made with forced labor. Companies operating in Germany are reporting for the first time on a new supply chain law and Canada’s Fighting Against Forced Labour and Child Labour in Supply Chains Act went into effect on January 1 this year. The EU is putting the final touches on a supply chain law with a penalty of up to 5% annual turnover for non-compliance.

A working definition of modern slavery is anyone who is forced to work without pay, under threat of violence, is economically exploited or is unable to walk away. The US Department of Labor has classified this as the condition for over a million minority Muslims working in western China, where about a fifth of the world’s cotton is produced. I’ve worked at the intersection of human rights and supply chains for over a decade with experience at both ends, from the children pulling minerals out of the ground to the CPOs who procure them. The challenge isn’t finding leaders who care. The challenge is the opacity of our supply chains.

The International Labor Organization estimates that 1 in 10 children in the world experience labor that is dangerous and harmful. Last month the New York Times exposed several cases of child labor in slaughterhouses and agricultural production in the United States, the $80 billion auditing industry that has failed to address it. The lesson here is what worked before doesn’t anymore. This movement toward supply chain transparency takes a new bravery and tenacity.

The quote ‘history doesn’t repeat itself, but it often rhymes’ attributed to Mark Twain works more as a statistical constant than an overused quip in this case. Society has handed the responsibility to address the worst form of human behavior to supply chain professionals. There is no escaping that fact. Procurement has been handed the torch of freedom. Will it burn out under the winds of paralysis analysis? Will it be placed in the bottom drawer under concerns of ‘economic headwinds’’? Or will the torch be carried with the necessary curiosity, humility and determination that history requires of us?

The world will be watching this year how companies prioritize their efforts to protect human rights in supply chains. Perhaps this year we’ll begin to write a new verse that doesn’t rhyme. That’s a song I’d love to sing.

Many thanks to FRDM for being a part of the series. Insider members can read our in-depth analysis of the FRDM solution here.

Read our senior analyst’s take on the key themes from the series here.

And read our series on Enabling supply chain transparency to combat forced labor and modern slavery.

As always, reach out to discuss any of the above.

Insights 2024