Beatrix Praeceptor, CPO of global paper manufacturer Mondi, shared how data had helped the organisation embed an ethical sourcing model.
Speaking at the CIPS UK Conference, Praeceptor shared that when Mondi decided to embark on a responsible procurement programme, she had to decide whether to integrate it or change the whole procurement strategy.
She said: “In principle what we decided was that we had to integrate [the new strategy] into normal sourcing activities.”
This way the company was able to avoid piling more layers onto an already complex system, she added.
The company went about implementing a risk assessment tool. working with an external provider, which takes data about suppliers based on basic attributes like country, industry and recent events.
Then this gives a risk score for factors such as water stress, labour abuses and environmental concerns.
Getting the data in the correct format was “a painful process,” said Praeceptor, because Mondi previously measured risk factors based on materials, while the tool required supplier information to be based on categories.
But once they had access to clean, compatible data, the simplicity of the tool has made it easy to make the switch. “It's not rocket science, it’s a simple decision tree,” she told delegates, adding that getting the data right first was the most important step.
This simplicity enabled the company to keep continuity in the way it communicated its values – of social and environmental responsibility – to its 50,000 suppliers worldwide, she said.
Where suppliers had violated these values the procurement team was able to “sit down and discuss” how they could comply. But with more easily replaceable suppliers, the tool meant Mondi could “simply substitute them,” she added.
“Words and messages travel very fast nowadays and we see a lot of companies being harmed by something that happens in the supply chain across the globe,” she said.
The risk assessment tool is currently only applied to tier one suppliers, but will soon be rolled out to Mondi’s tier two and three suppliers, she added.