Modern slavery concerns put supply chain compliance in the spotlight

  • Written by Peter Needle
  • Published on 20 October 2015
  • Blogs

Companies need to take control of global supply chain compliance, especially in light of recent legislation such as the Modern Slavery act. However, how hard is it to enforce compliance measures across a diverse supplier base? 

Supplier compliance strategies

UK businesses are under pressure to find a reliable way of managing and monitoring supply chain compliance across their entire supplier base. We’ve created a quick rundown of how they can approach this: 

  • Supplier contracts and a code of conduct can spell out a company’s expectations. This can help to depict a tough no-tolerance approach with suppliers, but these words become empty if they’re not enforced.
  • Training and educational programmes can help to develop supplier knowledge and abilities. However, this approach does require a significant commitment in terms of time, resources and costs.
  • Factory audits can be conducted by in-house experts or independent third parties, and confirm that suppliers are meeting set expectations. Unannounced follow-up visits are recommended to ensure that facilities weren’t prepped for the visit.
  • Compliance processes can help to improve supplier relations and performance in the long term. By working with suppliers to make corrective actions, companies can be more productive that if they simply cancelled contracts.
  • The personal approach can help to build relationships and ensure compliance. However, putting feet on the ground can cost a lot, and it isn’t always practical across complex supply chains with many suppliers. 

Collaborating on supply chain compliance management

Many companies are finding that they can make more of an impact on supply chain compliance by working together. This is especially true for smaller companies, as they often lack the necessary leverage to enforce meaningful changes. 

By joining together to form an organisation, organisations can lend weight to standardised compliance measures. As a result, it’s more likely that they will gain the attention of suppliers. The Accord on Fire and Building Safety in Bangladesh and the Alliance for Bangladesh Worker Safety are good examples of recently-formed collectives that represent the interests of many major garment retailers. 

“We are much more powerful and most effective when our fellow companies are demanding the same standards,” explained Jackie Sturm, vice president of global supply chain management at Intel Corp, to the Wall Street Journal. 

“If suppliers are hearing a consistent message from a broad cross-section of customers, that is when they are most likely to think it’s serious." 

Comprehensive compliance measures

Barry Blake, vice president of research at SCM World, a supply chain research firm, recently told the Wall Street Journal that large companies should prioritise problem areas if they wish to improve supply chain compliance. 

Many companies operate across different countries and even continents, and this complex and fragmented supply chain makes compliance measures difficult to enforce. While these companies will most likely check up on their primary suppliers, they may only occasionally examine their second and third tier suppliers. 

Blake argues that a company with 10,000 manufacturing partners, “obviously is not going to be able to go to every single one of them and talk to every single employee to make sure they are being treated fairly.” 

However, can you really hold your primary suppliers accountable if problems occur further down the chain? Ultimately, companies can’t rely on contractors to adopt and enforce their compliance strategies. And if it impacts your production, it will hurt your business - making it your problem. 

Segura’s software ensures visibility across all orders fulfilled by your nominated suppliers and subcontractors. We trace individual orders along their supply chain journey, creating a comprehensive audit trail. This gives our customers unrivalled supply chain visibility, and transforms their relationships with suppliers.

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