News Snippets, Strategy

Shaping the ethical supply chain

George Harb, Regional Vice President – APAC, OpenText

The modern supply chain is unrecognisable to that of yesteryear. What used to be simple connections between organisations and their suppliers are now complex networks. Today’s supply chains are all-encompassing and involve hundreds or thousands of external suppliers, partners and third parties, and are increasingly forced to keep pace with fast-changing economic, political and regulatory environments – both locally and globally.

One of the economic pressures being brought to bear on organisations is the need to understand and meet customer expectations for ethical and sustainable operations. Millennials and Generation Z emphasise the need for ethical sourcing and sustainability much more than generations past. As such, it’s important that when customers ask questions about how and where a product came from, the organisation is able to provide answers; failure to do so can lead to the business missing out on a new wave of customers, which will have a negative impact on the bottom line.

The ethical supply chain

Put simply, the ethical supply chain delivers the highest levels of ethical and sustainable operations, spanning three key areas—economic, environmental and social responsibility. A few examples include:

  • Removal of child and slave labour
  • Safe and hygienic working conditions
  • Adequate and equal pay, including acceptable working hours
  • Anti-bribery and corruption
  • Ethical sourcing and procurement
  • Environmental awareness and sustainability

Everyone’s responsible

Achieving an ethical supply chain requires organisations to understand who they’re working with and hold all parties involved in the supply chain accountable for ethical and sustainable practices. This means ensuring slave labour isn’t used as a means to source raw materials or workers aren’t being forced to endure unsafe conditions as products are manufactured.

Given the complex nature of supply chains, the onus of responsibility for ensuring these practices are avoided is not down to one individual or organisation. Instead, it needs to be a collective effort. With modern supply chains, parties have visibility and transparency on what is happening throughout other areas of the supply chain, so it’s important any irresponsible parties are called out for their wrongdoings.

While an organisation may be oblivious to unethical practices occurring within the supply chain, customers won’t accept ignorance of these activities as a valid excuse and will hold the brand accountable, ultimately having a negative impact on a brand’s image and reputation. This is why ensuring ethical and sustainable practices is the responsibility of everyone within the supply chain.

Supply chain on the boardroom agenda

It is clear that today’s customers want to know about the products they’re purchasing and the organisations they’re purchasing from. As such, when questions are asked, it’s imperative businesses have the answers customers are looking for.

This has paved the way for a new boardroom objective—complete and total supply chain transparency. Modern technologies allow organisations to have full visibility over what’s happening in their supply chains, but more importantly, stops them from absolving themselves of responsibility for what is happening within the supply chain. This transparency and visibility across global supply chains is exactly what’s needed in order to ensure ethical and sustainable supply chains.

Welcoming in the ethical era

As external expectations for responsible practices increase, there’s more pressure than ever for organisations to ensure they’re doing the right thing—directly or indirectly. With modern global supply chain networks, organisations can ensure they’re selling and engaging with ethical and sustainable products and services; by the same token, failure to ensure responsible practices will see customers hold organisations accountable. Due to customer expectations, the ethical supply chain has quickly moved from a nice-to-have to a must-have, with organisations that invest in technologies that enable full visibility and transparency across the supply chain, inevitably coming out on top.

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