Corporate Social Responsibility (CSR) is undoubtedly a big issue for business in 2005 with its potential impact on reputation, customer confidence and ultimately profits.
Whilst technology is facilitating better business, playing a crucial role in achieving internal CSR compliance for large and small organisations from the shop floor to the warehouse environment, it is deeper within the supply chain where companies are most at risk and yet still not employing enough scrutiny. This is where technology can be most beneficial and play a role as important as any Back Office, Head Office or even in-store EPoS system.
For the majority of companies who do not have the benefit of a CSR department, which enjoys the time to conduct deep levels of research into each supplier, CSR compliance audits are left to supply chain and procurement professionals.
Many suggest simply ask your suppliers what they are doing about corporate responsibility. A laudable suggestion, but consider a retailer with 4,000 suppliers. A CSR audit takes around a day per supplier and once aggregated across a procurement team of 15, that's 266 suppliers each or over 50% of the team's operational time.
The task is barely manageable and these are procurement professionals we're talking about, not CSR pro's! The team's ability to effectively undertake deep levels of structured analysis required to unearth non-compliance is stretched. Areas of risk are being missed daily.
Merchandise suppliers can have issues where they manufacture overseas and there have been well known cases in the past of those that have employed children. Not long ago, one major multiple retailer nearly employed a cleaning company to service a multi-million pound contract, which was found to be funded by an ill defined source. Another organisation was alerted that one of their suppliers was defrauding them of large sums leaving them open to charges of poor management and being asleep at the wheel. With the inevitable reputational risk, it wasnt an option for them to get into the courts.
Furthermore, its often not the first-tier suppliers who create CSR problems but second and third-tier suppliers and so on down the supply chain.
The reality is that for most, fighting for survival with limited resources, ever tighter margins and shortening budgets in an extremely competitive economic environment, puts supplier CSR scrutiny down as an unattainable luxury. Yet it could seriously compromise the business.
It seems to me that the answer lies, as is often the case when looking for
effective solutions in business, in not re-inventing the wheel. Isn't this all about business, procurement and supply chain professionals more effectively managing supplier relationships in a structured manner? This is where technology's powerful capability to store, manage and interrogate vast swathes of information, like business intelligence or forecasting & scheduling solutions, can be applied to return efficiencies and minimise CSR risk.
Methods of accessing supplier information is increasingly more sophisticated, to take account not just of financial status, reliability, quality standards and so on, but also conformity to minimum standards on health and safety, people development, pay and conditions, environmental good practice on topics like
recycling and all the other factors that go towards making up a good CSR policy.
Web based technology is now playing an innovative role here, offering structured tools that provide deep levels of insight into existing and prospective suppliers, mainly because of its ability to deal with huge amounts of information, making point and click analysis of suppliers very quick and easy.
Taking advantage of the technological solutions available for analysing the individual characteristics of thousands of suppliers in order to be able to check CSR credentials is an option now open to organisations of all shapes and sizes.
Deciding to explore these possibilities is surely one of the first steps an organisation should be taking in the long march towards a more equitable world. Early adopters of this technology will be winners, but there will sadly be late adopters and early losers.