Ensuring Supply Chain Integrity in 2015
It’s no understatement to say that the revelations about The Fawcett Society’s supply chain in November 2014 were brand shattering. Its campaign for equal pay for women had begun to get traction thanks to its eye catching ‘This is what a Feminist looks like’ t-shirt. Politicians and celebrities alike were proudly photographed wearing it, until it was revealed that the t-shirts were being made in a Mauritian sweat shop where the female workers were being paid 62p an hour.
This is not an isolated incident and it isn’t just a modern phenomenon. Ikea were using prison labour in the former East Germany back in the 60s and 70s, only now is this knowledge coming to light and tarnishing their brand. Stories of Nike using child labour in Asia have dogged the brand over the years, and Primark were found to have obtained their products from un-safe factories in Bangladesh where a building collapse in April 2013 killing 1,133. Once a reputation is tarnished it’s hard to get it clean.
Once a reputation is tarnished it’s hard to get it clean.
So why do these problems arise? It’s due partly to how modern businesses operate. Outsourcing is an established part of many companies working practices enabling organisations to grow and not be limited by their own skill sets and manufacturing limitation. With supply chains reaching far beyond geographic and political boundaries, consideration of how, where and with who organisations source from must go beyond quality, cost and on time delivery. Procurement and supply chain teams need to consider cultural, environmental and political situation, along with safety, ethics and Corporate Social Responsibility. Not considering these can have disastrous consequences. Outsourcing work can mean that a company doesn’t all ways have clear visibility of its supply chain.
One of the biggest challenges that a business faces is understanding the relevant commercial and compliance frailty within their supply chain.
One of the biggest challenges that a business faces is understanding the relevant commercial and compliance frailty within their supply chain. When procurement goes wrong the media is quick to highlight that the complexity of supply chains, multi tiers, cross boarders means organisations do not have suitable visibility of their supply chain. The more links in the chain the greater the opportunity for one of these links to break.
Although more difficult to demonstrate, a proactive approach is far more cost effective than a reactive one, once the chain has been damaged or broken the time and money required to put it right often eclipses any proactive investment. Therefore, maintaining an engaged and compliant supply chain is essential to the continued success of any organisation. Using the knowledge obtained from engaging with a supply chain will inform the proactive risk mitigation approach that will see the chain maintained.
With supplier relationships spanning the Globe it is important to establish a framework for measuring and maintaining compliance standards, in order to effectively manage the risks with in a supply chain. The only way to effectively achieve this is through sound data capture activities, driven by a framework of questions aimed at establishing levels of compliance within an organisation. This process can be extremely costly and time consuming – generally why the majority of organisations have done very little to proactively manage this business risk.
Utilisation by providing greater visibility and control of suppliers a third party scheme can be an effective way to manage complex compliance issues across large regional and global supply chains. Santia can provide a cost effective solution to compliance management within supply chains with Profiler. Profiler is an online, real-time, self service system providing an organisation’s supply chain risk profile according to its own objectives and priorities.
For more information on Profiler call us today on 02920 852852 or email us by clicking here.
Post date: 02 Feb 2015
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