Are you responsible for managing sustainability issues across complex supply chains? How robust is your process of managing the risks associated with your supply chain from the procurement of raw materials to the final delivery of the product? By using robust techniques companies can ensure and improve sustainability performance across their entire value chain. The risks that are most commonly assessed are: carbon emissions, deforestation, human rights, corruption and bribery.
How can you manage your supply chain?
There are a number of different ways to manage your supply chain including risk assessments, supplier survey & prioritisation, data collection, corrective actions and continuous improvement.
Risk assessments can be a useful tool for assessing your supply chain because they allow you to assess the level of risk held by your supplier. This can be done by mapping countries and/ or regions against known risks, and/or assessing sector, material, company, and size risk to gain an overview of your suppliers’ risks. This allows you to gain an overview of the negative impacts your supply chain is having on the environment and society, allowing you to concentrate your efforts on those suppliers who are associated with the highest level of negative impact first. To help improve risk assessment scores it is important to implement a corrective action plan with suppliers providing them with agreed actions for them to complete in a set timeframe. Audits can also be used as a tool to allow for a more in-depth analysis of individual suppliers and to help identify areas of improvement to ensure each supplier is improving their risk assessment score in the timeframe provided.
It is vital that you are assessing the maturity of your suppliers and continually working on improvement plans. One way of doing this is through supplier questionnaires. These can be sent to individual suppliers listing relevant questions to help you assess their current progress towards improving their social and environmental practices. This helps to give you an insight into what each supplier is doing and allows you to tailor your corrective actions based on the practices each supplier is implementing.
There are a number of different tools that can be used to help collate data on your suppliers. Examples include SEDEX, Ecovadis, and certification schemes. These tools can be used individually or in conjunction with one another to help manage, assess and report on your own operations and supply chains sustainability performance. Using these tools and platforms allows you to easily track your entire supply chains ESG performance as all the data is easily accessible, allowing you to manage risks efficiently and in a cost-effective way. These tools also allow you to implement due diligence into your supply chain management processes as they encourage you to implement processes and procedures that ensure you are compliant with relevant sustainability legislation. These tools also provide your suppliers with a corrective action plan, allowing you to effectively evaluate risks giving you the opportunity to focus your efforts more efficiently on those areas and suppliers identified as high risk.
Once you have identified the risks associated with individual suppliers you need to provide them with information on the corrective actions they will need to implement. Examples of corrective actions can be asking your suppliers to put in place policies to recognised international standards, such as ISO14001 or to certify raw materials through a sustainability certification scheme such as Roundtable on Sustainable Palm Oil (RSPO), Rainforest Alliance, Global Organic Textile Standard (GOTS) etc. Certification schemes can be a useful way of ensuring suppliers are implementing practices and procedures that align with globally recognised standards and helps to encourage your suppliers to be transparent and open about their current practices and procedures.
It is important to collaborate with your suppliers on shared issues to help improve your own practices and procedures and your supply chains. This can be done by deciding on corrective actions together and agreeing timeframes to help minimise risks. If an action plan isn’t working, it is important to consider reformulation to change the corrective action to reduce the risk more effectively. If suppliers or certain regions/countries have been identified as high risk, and the supplier or suppliers within the country/region are not implementing the required corrective actions it may be worth considering changing suppliers to reduce these risks.
Ensure that you are reviewing your risk assessments and other supply chain management tools on an annual basis to ensure your supply chain is making continuous improvements. It is important to track progress to ensure you can indicate the achievements that has been made to improve your own operations and supply chains sustainability performance.
What are the benefits of supply chain management?
- Allows you to delegate time more efficiently, focusing on suppliers with higher risks first.
- Helps you to reduce your impact on society and the environment therefore helping to improve your reputation and gain a competitive advantage
- Helps to reduce your scope 3 emissions, helping to reduce your overall carbon footprint
- Help to improve transparency when reporting
How Achieve Goal 12 can help
We have a full end to end process from risk assessment through to improved material sourcing.