I recently wrote about the basics of building a supply chain that works for your business. The next thing to consider with supply chains is how to ensure they’re compliant and ethical.
More and more investors and consumers are focusing on businesses that take their environmental and social responsibility seriously. And, despite resistance in some quarters, the EU is pushing ahead with plans to make environmental, social and governance (ESG) reporting mandatory, so the focus on this area of business is only likely to increase.
As a business owner, one of the first things you need to assess to ensure that your business is ethically sound is your supply chain.
No matter what kind of business you run, starting at the source and examining your product’s journey from the beginning is essential to ensuring that your supply chain is clean. In this article, we look at a few things you can do to keep your supply chain clean.
Choose your suppliers carefully
When complex components and global suppliers are involved, it can be tricky to ensure that your supply chain is ethically sound. One of the ways you can ensure that your supply chain is clean is by taking a closer look at how your product is actually made and where its raw materials are sourced.
In some industries, production methods have changed very little in the past century, and many offshore suppliers have not bothered to adapt their operations to meet today’s ethical standards.
It might seem like an easy option to choose the same suppliers as industry leaders, but it’s best to assume that they have chosen incorrectly, so consider creating your own supply chain instead that meets your own standards.
Hire an on-site team or consultant
To make sure that your supply chain remains clean, it’s a good idea to hire an independent on-site team or consultant separate from your factory operator, so you can keep a close eye on production after you have chosen the sources for your raw materials.
It’s also important for you to request regular status updates, daily reports and photos to make sure that everything is running as it should while ensuring that workers are being treated ethically and quality standards are met.
Work with third-party certifiers
Working with a third-party certifier will hold you accountable for the welfare of your workers and will ensure that your supply chain operations are held to a high standard.
A third-party certifier may inspect your facilities, ensure your workers are paid a fair wage and can execute a full audit of your financial and business data to look for flaws that you may not have noticed.
The additional cost of working with an external certifier will be worth it to keep your supply chain clean!
See it for yourself
It’s impossible to gather a full understanding of the condition of your supply chain operations unless you see it in person. Before you visit your manufacturing facility, create a list of things to check as you walk around to ensure that everything is up to a high standard, such as the cleanliness of the facility and the location of fire exits.
It’s also a good idea to talk to the workers (language differences permitting) and ask them their opinions on their working conditions and how they could be improved.
By following these tips, you can make sure that your supply chain is clean and that your business is fulfilling its environmental and social responsibilities.
