Level of ambition for responsible supply chain management
Here, you can get help to set the level of ambition for the work on responsible supply chain management and to check that your own house is in order.
Set goals for your activities
You should first determine what you wish to achieve with responsible supply chain management
Many companies begin the process of implementing responsible supply chain management because their customers request evidence documenting suppliers' CSR performance. Others do so as a consequence of media cases concerning suppliers' adverse CSR issues. A third reason may be to safeguard and improve product quality and to build closer relations with suppliers.
When setting the goals for your work with responsible supply chain management, your starting point should be the international expectations of these activities. Today, every company - no matter how large or small - is expected to take responsibility for avoiding and handling risks and adverse impacts on CSR principles, no matter where in the supply chain they occur. The expectations of your work naturally depend on the risk scenario you face, as well as your size, sector, ownership structure, etc.
Your primary goal should therefore be to document that you have effective systems to avoid and manage risks and adverse impacts on CSR principles among your suppliers. Your supply chain management will thus contribute to ensuring that suppliers' CSR issues do not damage your reputation, affect supply reliability or diminish the quality of your products. This will assure customers, investors and other stakeholders that no unforeseen problems will arise.
It may also be one of your goals that responsible supply chain management must contribute to strengthening your business. You can connect your suppliers more closely to the company by cooperating on improving their CSR performance. This cooperation can help you to reduce your production costs and develop more sustainable products, and thereby gain new market opportunities. Your efforts can also be used actively in the branding of your company. This can help to strengthen your market position and develop your customer relations - and to attract and retain the right employees. Read more about the benefits of responsible supply chain management.
Allocate resources to the work
You should then decide which resources you can allocate to the work.
Responsible supply chain management requires both time and money. When you know what you wish to achieve, you must therefore decide which resources you will allocate to this work. This affects such factors as how many suppliers you can evaluate more closely, and how many suppliers you can cooperate with on a closer basis. You must expect to allocate more resources if you wish to contribute actively to improving your suppliers CSR performance, for example via the development of new competences.
You should include in your considerations that the more resources you devote to preventing risks in the supply chain, the fewer resources you will have to devote to handling problematic conditions. In addition, resources invested in cooperation with suppliers will be matched by the gains of closer relations with suppliers.
Keep your own house in order
You must keep your own house in order and ensure that your procurement practices do not conflict with your goals for responsible supply chain management.
Responsible supply chain management is part of your overall CSR work. This means that you should also live up to the requirements you make of your suppliers' social responsibility. When you set the level of ambition for your supply chain management, it is therefore important to perform a reality check concerning your own CSR issues and your own CSR work.
Under Keeping your own house in order you can read about the internationally recognised CSR principles that you are expected to comply with. Under Tools you can read about tools to support your internal CSR work in your own company. Here, you can find the Global Compact Self Assessment tool, which can be used to assess your work and results measured against the Global Compact's ten principles. There is also an EU guide on human rights that can help you to establish policies and processes to identify, prevent, remedy and account for adverse human rights impacts.
It is also vital that your procurement practices do not conflict with your goals for responsible supply chain management. This means that you should ensure that your procurement practices do not have an adverse impact on your supplier's observance of the CSR principles. You should therefore consider your required delivery times and prices, as well as your order volume in relation to suppliers' production capacity. Especially in sectors subject to high and low seasons, there will often be a lot of overtime during high season, and unemployment in low season. If possible, you should therefore place orders with suppliers in good time, and spread your orders over the year.