It has been interesting reading the approach from the Chartered Institute of Purchasing & Supply in terms of their call for a professional “licence to practice” to protect the public. Understanding the responsibility that lies with the procurement function, in how their actions impact not only their own business but throughout the supply chain in both human and environmental factors.
Our business values are absolutely about responsible sourcing including; ethical trading, product safety/compliance and sustainability. Believe me; it takes a lot of commitment from everyone in the team to deliver on this. It is critical to engage all your team and suppliers in being able to deliver on compliance and ethical issues. But it is also tough sometimes in educating the various stakeholders from buying organisations – price is a critical factor and it is important to be able to explain why it’s worth those few extra pence.
All very well but how do you start this process in your own business, what do you need to be doing to be ethically sound and to meet global product compliance requirements? Who cares? Does it is really matter to the corporate buyer and the ultimate consumer?
Well the answer is yes it does matter to the consumer. They are becoming clearer about ethical business, about understanding where their consumer products are produced and they have the power to make their message heard. Clear and fast thanks to social media and so it should matter to the corporate buyer and all their stakeholders too.
I read a very interesting article in the Director Magazine – February issue – “Warrior Consumers – why your reputation is in their hands” it talks about the powerful platform consumers now have to vent their frustration at business behaviour through social media.
I have always found when you talk to consumers, buyers or marketeers about ethical trading they instantly relate it to child labour but they have been less aware of other aspects. Since the horrendous factory collapse in Pakistan and the tragic garment factory fire in Bangladesh other issues have become more apparent.
The article in Director states “Although labour issues are already well covered, it came as a surprise to some of our members that the British consumers expect them to be concerned as much with factory buildings as with the age of the workers making the garments. The truth is that consumers increasingly expect us to go the extra mile when it comes to ethical sourcing – even if that means ensuring qualified British surveyors are drafted in to check on building safety in advance”.
A responsible supplier will put actions in place to protect your brand reputation. This means a careful process of due diligence in selecting suitable factories, often including factory audits for example the SEDEX 4 Pillar which covers environmental, labour standards, H&S and business practices.
These approved factories will be slightly more expensive because they have invested in the right health & safety, work practices and they pay the correct wages. There is a cost in behaving responsibly but compare that to a damning piece of social media? Have buyers calculated that cost to the business, brand and reputation?
How about the environmental side of this? What actions do we all take to be more sustainable in respect for our world long term? There are many things that can be done with products to make them a more sustainable alternative. Yes that takes a bit of innovation, research, time and it may cost a little more. However, thinking about what you buy and evalutating the alternative solutions may even end up saving you money or giving you an edge over your competitors. This we experienced recently with a new innovation for one of our charity clients. So we should not be put off at the outset but inspired to investigate, innovate and make a positive change for the business being more sustainable.
It is important to find the opportunity to talk to likeminded, responsible businesses and dedicating time to get to events to share wonderful knowledge and expertise is critical. Only when you really get behind sustainability and take some positive steps will you appreciate there are some very exciting opportunities.
What about the products that you buy? In the promotional product sector (clearly my space) and of course in the retail environment there is an expectation by the recipient or consumer that the products with your brand on are fit for purpose and safe. But are they?
Shockingly there are many products imported into Europe that are not safe but what’s worse, many buyers will leave the due diligence to the supplier or, simply assume compliance. Many corporates will sign their suppliers up to a contract that might say products should comply with the EU regulations. But where is their own due diligence in that – what actions are they taking to ensure compliance and demonstrate their duty of care on individual projects?
It was interesting to see the BBC on Fake Britain (Furniture Inferno – 13 January 2014) where they revealed that sofas and mattresses were being sold in some the UK’s best-known retailers which were illegal and potentially lethal. Stating that the UK has some of the toughest fire regulations for furniture in the world and consumers expect that furniture to be safe. Fake Britain discovered some furniture dramatically failing crucial fire safety checks and some items were even being sold with fake fire safety labels.
This is without doubt a complex area and if some of the biggest UK retailers can’t get it right it demonstrates even further how critical it is to show your duty of care. Is the safety documentation being requested and checked? We don’t have the 1000’s of products that retailers do but we use approved inspection partners to support us is in this area. Not checking the product compliance, testing and certification may put your customers, employees or consumers in danger of injury or worse. Let alone the legal requirements and potential damage to the brand or organisation.
I would love to see more procurement teams requesting proof of product compliance and questioning their suppliers on the products they buy, particularly the high risk products. I often have suppliers say to me “No one else has asked me to provide x y and z” – well they should in order to protect themselves, their clients and the ultimate user of the product.
Product safety is a complex space and it is constantly changing – we as a business need to keep on top of it for our UK, European and other markets such as the US, Canada, Australia, UAE because many of our clients campaigns are distributed around the world – there are different requirements in different markets and this is a critical part of our role in protecting the brand reputation.
For example the California Proposition 65 – “No person in the course of doing business shall knowingly and intentionally expose any individual to a chemical known to the state to cause cancer or reproductive toxicity without first giving clear and responsible warning ……” Businesses need to get on top of this to understand their position and protect themselves and their clients. Again in the promotional product area in the USA the main trade association PPAI has been extremely proactive in educating their members, insisting they complete specific training in order to remain a member. Bold but brilliant in my view!
We all need to carefully vet the expertise of our supply partners –how knowledgeable are they in product safety and can they demonstrate how they manage this process? If procurement ask these questions it sends a powerful message throughout the market and in itself will make a different to compliance being achieved.
The complexities of the modern world; managing supply chain risk from fraud, modern slavery, political unrest, product compliance … certainly brings many challenges to today’s procurement professionals. Any positive actions which improve responsible procurement practices definitely get my vote.
So next time you look to negotiate on price alone – think about the true cost to the organisation, brand or client!
Gill Thorpe – FCIPS – Managing Director – The Sourcing Team