Implementing an Ethical Sourcing Programme
What is an Ethical Sourcing Programme?
Typically in outline organising an Ethical Sourcing Programme involves either establishing a small internal organisational structure (or outsourcing the service), introducing policies, procedures and guidelines based upon best practises, the selection and ongoing review of auditors in key offshore locations and systems to drive continuous improvement which are seamlessly integrated with Supplier Relationship Management (SRM) programmes.
Supplier Code of Conduct.
A fundamental element of any such programme, is the Supplier Code of Conduct, which establishes unequivocal standards for vendor behaviour in acordance with an appropriate Ethical Sourcing Standard.
Achieving Supplier "Buy In"
In the same way that suppliers have to formally sign up to quality assurance standards, it is necessary to obtain confirmation they both understand and sign-up to their obligations under an Supplier Code of Conduct.
An important element of this part of the process, is establishing procedures which removes potential excuses for non-compliance downstream. This means that the Supplier Code of Conduct must be communicated clearly, its message appropriately reinforced and the procedure for the application of sanctions in the even of non-compliance clearly explained. Best practise Ethical Sourcing Programmes have elements to address these issues clearly defined.
Auditing of Supplier Compliance
It can be to challenging to assure compliance with the standards of an Ethical Sourcing Programme, particularly because its not unknown for some suppliers to systematically misrepresent their conformance to standards during ethical sourcing audits.
This means that when dealing with offshore suppliers, local auditors need to be selected using an in-depth approach to reviewing both their supplier auditing and self-auditing procedures. Testing the transparency of prospective suppliers of auditing services is a key part of any selection process, so that throughout the lifetime of the relationship auditors are themselves prepared to be scrutinised.
Driving Continuous Performance Improvement
Conformance to ethical sourcing standards needs to be measurable, so that improvements can be encouraged as part of an ongoing supplier relationship management programme. Performance metrics need to be carefully designed accordingly.
Procedures and Sanctions in the Event of Non Compliance
The procedure for the application of sanctions in the event of non compliance, must be clearly understood from the inception of the commercial relationship, and when the Ethical Sourcing - Supplier Code of Conduct is not complied with, it is crucial that suppliers understand that appropriate sanctions will be applied.
Corporate Social Responsibility Reports
Any ethical sourcing programme will have a considerable input into regular Corporate Social Responsibility Reports.
Your Own Ethical Sourcing Programme ?
Get in touch if you'd like to know more about introducing an Ethical Sourcing Programme for your organisation.
© www .interim-management-purchasing.co.uk June 2012