Today’s supply chains are not only an effective means of ensuring business continuity, but they have also become a bastion for ethical practices. It is no longer enough to know what direct suppliers are doing. Companies need to understand the ethical and sustainability working practices of each and every supplier connected to their supply chain. If companies cannot monitor the ethical or responsible sourcing practices of their suppliers, it will be difficult to manage the suppliers’ overall performance.
Information lies at the heart of building and maintaining an ethical and sustainable supply chain. Accessing and using large amounts of information effectively creates an Information Advantage. And visibility and transparency allows companies to maintain an ethical supply chain and good business practices.
Why an ethical supply chain is important
Organizations must have access to data about ethical working practices, sharing and collaborating with partners and customers when required. Having clear and complete insights into information from every part of the supply chain not only helps businesses live up to customer expectations but allows them to demonstrate how they are doing so.
According to Accenture, 62% of consumers want companies to have ethical values, demonstrate authenticity and take a stand on current and broadly relevant issues, such as transparency, fair employment and sustainability. Sixty-six percent said they think transparency is one of a brand’s most attractive qualities. When companies fail in these areas, customers speak up to complain (53 percent) and stop doing business with the brand (47%).
Today, 65% of consumers say they try to make a positive difference through their choice of everyday purchases. Customers are more informed and more demanding than ever, with research showing as many as nine out of 10 millennials will swap brands for one they believe is more ethical. For organizations that make ethical working practices a priority, this could be an opportunity worth $996 billion.
Defining the ethical supply chain
Businesses have a responsibility to monitor key areas of their own operations and those of their trading partners, such as work conditions, the provenance of materials, environmental performance, financial and HR processes and more. By design, ethical supply chains aim for the highest possible levels of ethical and sustainable operations focused primarily on three key areas—economic, environmental and social responsibility—with a special focus on:
- Safe and hygienic working conditions
- Fair pay and working hours
- Anti-bribery and anti-corruption measures
- Ethical sourcing and procurement
- Environmental awareness and sustainability
- Child and slave labor elimination
The shared responsibility
In complex global supply chains, trading partners have a vital role to play in ensuring ethical operations. Having access to the right data at the right time is vital for these responsibilities. Companies can no longer absolve themselves of responsibility for what happens at any point in their supply chains. Business partners demand visibility into whom they are dealing with and their business practices prior to establishing working relationships.
In a fast-changing and complicated world, information helps to quickly identify and avoid potential problems that could damage an organization’s business reputation, such as spotting a supplier breaching agreed on ethical policies and acting quickly to rectify any issues.
Those supply chain professionals that have built transparency and visibility into their operations have an advantage. They have the insight they need to ensure their business follows ethical policies and practices.
Businesses today have access to advanced tools and solutions to gain transparency and visibility in their supply chains and offer the Information needed for a deeper understanding of customer needs, better visibility of market changes and intelligent insights from information across the organization and beyond.
With this technology, today’s companies can build transparent, ethical and environmentally responsible supply chains, not just for the planet and those who live on it but for business. With insight into each point, supplier and vendor along the supply chain, the Information Advantage enables organizations to be more ethical, more sustainable and more environmentally responsible.
OpenText Global Partner Directory helps companies build a foundation to centrally manage ethical sourcing related information for all trading partners connected to OpenText™ Trading Grid™. Contact us to learn more about how it can help organizations achieve these goals.