Client Resources, Supply Chain Trends

How Do Supply Chain Ethics Play a Role in Your Business?

In his new book Real Food/Fake Food, author Larry Olmstead described how a range of food products, from olive oil to coffee, have been adulterated by manufacturers in an attempt to cut costs.

For instance, many olive oils have been found to be diluted with other lower grade oils. Investigations have also found honey is often cut with high fructose corn syrup.

The revelations like these and many others have shed a light on the rising responsibilities of supply chain managers and their staffs, which now have obligations that go far beyond just keeping costs down.

A lean, nimble supply network is crucial in the ultra-competitive global marketplace. Ironically, supply chains are often packed with all kinds of contractors, and this means higher risk and an elevated responsibility to assess and keep an eye on supplier performance and behavior.

Companies with a large supply web must deal with a high degree of complexity in safeguarding their ethical obligations, public image and position in their industry, sometimes dealing with up to 10,000 or more suppliers. The way those contractors behave could make or break the multibillion dollar corporations that depend on them. While regulation pushes companies toward being socially responsible, shoppers will punish businesses that aren’t conscientious. For instance, shoppers have pushed for and received country-of-origin data on seafood in restaurants and stores after an investigation showed shrimp processed with slave labor made its way into the U.S.

Poor working conditions, dubious financial transactions, skirting of ecological rules or inferior quality can all become scandals that affect the contracting business. Consequently, corporations must continuously assess and monitor supplier functionality and behavior.

A few things to consider

Institute for Supply Management (ISM) has produced official recommendations for supply chain personnel with respect to ethical behavior. These guidelines can lower the risk of ethics-related lapses taking place.

Most importantly, the ISM recommends that companies don’t put up with any kind of corruption. Businesses should put clear anti-corruption policies into place for workers, immediate suppliers and the expanded supply chain to follow. Worker training should be integrated to back up these policies.

Companies should also encourage diversity all over their organizations and from their supply partners. Diversity remains a hot-button topic and rightly so. Cultivating a wide group of suppliers, workers, external partners and affiliates will develop an environment of inclusion and diversity.

The ISM also calls for supply chain organizations to embrace environmentally friendly practices and encourage environmental responsibility. Businesses should strive to abide by and exceed compliance with all relevant ecological laws, laws and protocols. Workers should have all the instruction and resources required to make environment-friendly decisions.

As the recent seafood scandal pointed out, companies must be concerned with human rights issues around the world. All humans have rights despite legal jurisdiction and regional factors. Businesses should not work with suppliers who breach these rights.

At ZDA, we adhere to the strictest ethical guidelines and seek out client companies who do the same. If your organization is looking to partner with a leader among supply chain recruitment agencies that has ethics as a top priority, please contact us today!


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