Is supply chain transparency an impossible target? - Supply Management

Is supply chain transparency an impossible target?

Ian Nicholson is managing director at Responsible Solutions
posted by Ian Nicholson
31 March 2016

Never before has there been this much pressure to know about your supply chains.

Organisations with a turnover greater than £36m and a year-end of 31 March will be the first to have to publish a statement detailing what they have done to tackle modern slavery, and their efforts to make their supply chains more transparent. So is this the starting point on a journey to transparency or are we aiming for an impossible target?

The advent of the Modern Slavery Act in October 2015 has brought issues of exploitation, human trafficking and forced labour right to the top of the agenda. And rightly so. Businesses need to start accepting a moral responsibility for ensuring their supply chain is ethical, because not knowing whether illegal labour practices exist in your supply chain puts you at the same level of risk as if you knew about the issues and did nothing. Transparency is key to demonstrating accountability and will help to build business resilience against damaging exposes and risks associated with modern slavery.

Of course, it is challenging to gain transparency within your operations, especially if yours involve multi-tiered, complex, global supply chains. But complexity no longer cuts it as an excuse. Modern slavery and exploitation risk increases as materials and suppliers become harder to trace, therefore, the complex supply chains demand most attention. Being aware of risk is an integral component of effective supply chain management, and one that takes time to come to terms with. Starting to change your auditing processes and forming more trusting and collaborative relationships with your suppliers is an even longer term undertaking. Waiting until the last minute to do anything is likely to place you behind your competitors, and without proactively finding potential risks in your supply chain, you will end up on the back foot, reacting to issues when it is too late. This is likely to put your brand reputation at risk as well as cause significant disruption to your operations.

Ethics are not just an issue for large organisations. The £36m turnover threshold only relates to the reporting part of the Modern Slavery Act, and any business can be prosecuted if slavery is found in their organisation, regardless of size. But small businesses are likely to have different risks and drivers for traceability. Brand reputation may not be such a big driver being further away from the public eye, however, the risk of being prosecuted and losing work should be impetus enough.

So if you think transparency is an impossible goal, then you need to think again. The attention being placed on modern slavery is only going to increase after the first deadline day of 1 April, so what better time to start taking those all-important first steps than now?

For more information on the issues covered in this blog, please visit ethicalsourcing.co.uk, where you will find freely available resources such as:

  • An Ethical Sourcing Risk Exposure Tool
  • A Designer’s Guide to Ethical Specifications
  • E-learning modules on ethical sourcing, including modern slavery

Ian Nicholson is managing director of Responsible Solutions

 
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