French CaldwellWith the global financial crisis, one might be tempted to let slide some of the focus on sustainability and corporate social responsibility. Yet, as we’ve seen from recent scares like tainted baby formula and lead paint in toys, the need for a close look at the integrity and reliability of supply chains is higher than ever. Walmart is reinforcing its high expectations with its Chinese suppliers, and Heinz recently stated that its goal is to be the most “trusted” food processing company.
While the risk of a high profile supply chain failure that threatens human life or safety is never a good thing, in a recession when margins and market share are threatened, the advantage will go to those companies who maintain a strong focus on supply chain sustainability.
Supply chain sustainability requires competetence in supply chain risk management, and the ability to transfer your values for corporate social responsibility to your suppliers at all tiers. Some questions to consider are:
How transparent are the risks at the second and third tiers of your supply chain?
What reporting systems from your suppliers are in place, and how effective are they?
Do your suppliers take your social responsibility requirements seriously, and are how do you audit them?
Are there means to track deficiencies and consequences for failure to correct them?
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1 Nick Jones October 28, 2008 at 1:37 pm
Also, staying out of jail is top on the list of management motivating factors. This is closely followed by staying out of the tabloid newspapers. Supply chain failings such as poisoning people or pets can land you in jail or generate massive bad publicity. Even in a recession the risk is too great to ignore.