Bridging the supply chain perception gap

30 May 2013
With the death toll for the Bangladesh clothing factory collapse having passed 1,100, this tragic incident has resulted in a level of public anger at not just the owner of the factory but the companies whose goods were produced there. This anger demonstrates many consumers expect organisations to be accepting a measure of responsibility for their supply chain that goes beyond just selecting a supplier and taking delivery of products. Furthermore, it is no longer seen as acceptable to place the blame at the door of local regulators and decry all responsibility for the manner in which your goods are produced. The manifestation of this is while an organisation’s duty of care both towards its customers and accordingly its duty to select a responsible supply base has long been known, this duty of care is now being extended to the tiers within that supply chain and not just the top tier that an organisation deals with directly. As was so frequently observed during the recent horse meat scandal, consumers clearly feel an organisation has a duty to ensure the products they ultimately supply are correctly labelled and contain the ingredients that are claimed, regardless of the length and complexity of the supply chain. The tragedy in Bangladesh seems to demonstrate another facet of this duty of care, namely ensuring the manner in which an organisation’s goods are produced throughout the supply chain is safe, responsible and does not lead to the workers being endangered. An article in The Times this month stated: “While the horse meat scandal was indicative of the importance of sourcing and traceability, the lessons can be applied to any sector involving the movement of physical goods.” These lessons extend even beyond the movement of physical goods to all organisations that utilise suppliers – that is to say, pretty much every organisation. The article goes on to say, “The mea culpa approach is all well and good, but the consumer needs to see that something beyond a PR exercise is actually taking place.” The challenge facing organisations now is twofold. How do they deal with the fallout of the incidents that have already occurred and start to win back public trust? Secondly - and perhaps more importantly - organisations need to know who their supply chain is and accept their supply chain is intimately linked to the perception of their business. They need to be proactively looking for these risks and prevent them, not just ensuring they have a good PR agency to help rebuild afterwards. ☛ Justin Hughes is a supply chain expert at PA Consulting Group
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