In supply chains, what you can't see can hurt you badly

From Patagonia’s announcement in 2011 it had found slavery in its supply chain, to the news from Apple it would insist wronged workers were repaid by violators (resulting in over $4 million in reimbursements to some 4,500 workers), human trafficking has become a very real concern for companies of all sizes across industries.

Apple and Patagonia have proved that being proactive about stopping modern slavery can have a positive impact on a brand's image.

In today’s digital, networked economy there are plenty of opportunities for companies to gain the visibility into their supply chains needed to do it. By leveraging the power of business networks and digital platforms, companies can uncover where there may be slave labour in their supply chains and take steps to mitigate it. And there are tangible benefits for companies that do so:

Customer admiration and loyalty. Customers who believe they are buying from a company with strong corporate responsibility become fierce brand advocates.

Employee pride. Most people strive to be part of something bigger than themselves, instead of simply having a “day job”. Brands that go the extra mile to ensure they are fulfilling a purpose beyond generating profit will find their employees are more productive, loyal, forward-thinking, empathetic and aware of the “big picture".

Greater compliance and supply chain stability. When the supply chain is free of violations, there is little to no risk of a vendor spontaneously being shut down, banned from trade, or otherwise made obsolete. This means increased stability in your supply chain, which creates a firm foundation for business.

There are many tools available and agencies eager to help companies looking to be more responsible about the ethics of their supply chains, such as Made In A Free World. Originally targeted towards ethically minded consumers, the non-profit organisation boasts the world’s most comprehensive forced labour database, which maps the materials of a countless number of products and services right down to their raw materials and labour inputs. Using the database, in conjunction with business networks like SAP’s Ariba Network and the more than 16 years of transaction and relationship data that resides on it, companies can gain transparency and insights that enable them to:

• Evaluate their spending and supply chain and get a view into areas where forced labour might exist
• Be alerted to potential future risks by triangulating a myriad of inputs – like supplier performance ratings, payment history, etc
• Identify alternative sources of supply with supply chain transparency and fair labour practices to help mitigate these risks
• Access category-specific playbooks that provide a framework for detecting forced labour and outline actions to remediate it

Armed with the right information, companies can make more informed decisions about their supply chains that not only help their business, but make the world a better place.

☛ Chris Haydon is senior vice president, solutions management: cloud procurement and business network at SAP

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