The challenges of building ethical supply chains on a global scale
Nuanced, subtle and complex – how speakers described the challenges
Successful supply chain management requires commitment and input from all parties, whether you’re a supplier, subcontractor or a buyer. At our events in Aberdeen and Birmingham, we heard from experts about their advice on best practice for all parties in the chain.
Covering Construction, Utilities, and Oil & Gas, the experts stated that the keys to success are surprisingly similar regardless of the industry you operate in.
The discussions centred on how to give yourself the best chance for success in the tender process, including an in-depth look at how to approach the latest carbon reporting requirements.
Positioning yourself for success
We all want to win new contracts and grow our business through infrastructure projects such as HS2 or Oil and Gas contracts handled by the OGA. But how do you position yourself in the best place to win those contracts? The short answer, as outlined by both Bill Cattanach and Matt Harris, is to make sure you understand what your customer needs, and align yourself to that. Being clear about what the tender process is, what the project goals are and understanding the underlying values of the programme are critical for success.
Having gained a clear understanding of the tender process, being able to demonstrate your capabilities and your commitment to the industry will set you apart from the competition. Aligning yourself to industry standards and the project values can be achieved through initiatives such as the Common Assessment Standard (for Construction) and Scope Specific Audits (from PRI and for the Oil and Gas sector). Both of these help you to position yourself for success.
Know your Carbon Footprint – be ready for the UK reporting deadline
Changes in regulations, and the urgent need to address climate change, means more organisations want to demonstrate their efforts to reduce carbon output. But the task of measuring that output reliably can seem daunting. Glenn Cargill and Mike Tournier both outlined their advice towards achieving that goal: Measure, Manage, Verify, Mitigate and Market.
They’re both advocates of drawing on objective third party verification, for example using a solution such as Achilles Carbon Reduce. This is essential for ensuring reliable and consistent measurement and monitoring of carbon output. You will also find online guides can be a great help, whichever stage of the carbon reporting journey you’re currently at.
This followed a theme of not only making sure you have insight into your suppliers but accepting the responsibilities that come with that insight, and how best to ensure you have an ethical supply chain.
Make supplier due diligence essential
Supplier pre-qualification should be an essential part of all procurement processes – a view expressed by Heidi Jorgensen from BW Offshore and Nathalie Ritchie from National Grid.
An embedded supplier due diligence process minimises risk and highlights potential weakest links. It can also be used to promote a specific agenda such as sustainability.
A few top tips for Procurement teams here were:
• Collaborate with suppliers to identify and mitigate risk at tier 2+.
• Make sure your Supplier Code of Conduct is an active document by embedding regular reviews into the project cycle.
• Be aware of cultural sensitivities in the supply chain and avoid miscommunications.
Take inspiration from what other organisations have done; read about how Takeda centralised their contractor management and prequalification process.
Understand the growing risk of Modern Slavery
It’s a common misconception that modern slavery only occurs in certain industries or countries. As we heard from Shirley Goodrick from Slave-Free Alliance, this is most definitely not the case. Enforced labour is happening in the UK, and across all industries. In fact, according to the latest NRM report, the single highest nationality of trafficked/exploited people was UK national.
Education is the key here. Buying organisations need to learn how to recognise the warning signs of enforced labour. Supply chain Audits are critical to get to the level of detail required to unearth indicators of enforced labour. The Achilles Labour Practices Audit, for example, includes individual worker interviews conducted in a way that supports that individual’s candour about their working situation. Having identified the problem, you then need a clear plan of action, something which the Slave Free Alliance can offer advice on.
Across sectors and industries, we face common supply chain management challenges. The best practice advice is that successful supply chains rely on all parties to commit to self-educate and improve, which is achievable using the tools and advice widely available.
Click on the buttons below to download your copies of the slides from the two events covered here.
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