Responsible Sourcing & Supply Chain Sustainability; Whose responsibility is it really?
“Responsible sourcing”
Go ahead, copy and paste that into google.com.
The results will look an awful lot like this screen this….
Of course, the results are partially dependent upon your location and prior search history because Google uses complex search-algorithms to assure information is individualized to the user, but that’s not the point of this exercise or post.
Now…
Your search results are most likely filled with page upon page, upon page, of different companies’ responsible sourcing strategies on their websites.
But, why?
Well, there are many reasons why companies search for the spotlight of sustainable brand association and having web pages to describe their methods, technological enhancement and core values for sourcing materials and products responsibly is a brand communication.
Simply put though, they are catering to your growing demands: the customer, the user, the stakeholder.
Sourcing has become an area of increasing focus for procurement teams globally. Sourcing has become a differentiator of the brands that create success through sustainability, and those who fade to the background of popular acceptance.
Just as many activities, present in supply chain management, responsible sourcing of materials requires a complex network of moving parties to collaborate in harmony in order for it to be done ‘responsibly’.
Bringing us back to the reasoning behind why responsible sourcing strategies are posted to the websites of the world’s largest brand names, and some of your first results when searching ‘responsible sourcing’.
Organizations know the risk involved in sourcing materials in a responsible, sustainable, and ethical manner, and they want to assure you (the stakeholders) that they’re trying their darndest to manage those risks, and provide customers (you) with sustainable and quality products.
What is responsible sourcing really?
Traditionally speaking, “[…] the supply chain has been driven by the requirements and buying practices of the brand — priority is often price and the importance on remaining competitive and fast to market” (bpma.co.uk 2015).
Sourcing has historically been an activity of differentiation or competitive edge by sourcing to produce a product for a cost efficient bottom-line that could sell faster, and better, and cheaper than the competition; improving top-line value with little regard for the bridges burnt on the path to success.
Today, sourcing has transitioned. “Sourcing, operating as a means to solely create financial gain and opportunity has shifted [and is now practiced as a] strategically embedded corporate focus of great complexity” (Jenks 2017).
With that being said, I’d like to take a shot at a definition of responsible sourcing that I’ve formulated myself.
Webster’s did not sign off on this and, no, this post is not sponsored by businessdictionary.com.
Responsible sourcing is a business critical function in which, participating actors are equally accountable for the ethicality and sustainability during the supplying, purchasing, manufacturing and retailing of goods and services.
Who’s responsible for sourcing responsibly?
Typically, the accountability of sourcing responsibly is placed upon the organization, which is sourcing materials.
ISO 20400, a sustainable procurement guidance standard (not a recognized certification, simple guidelines for sustainable procurement action) says that, “An organization should be accountable for its own impacts on society, the economy and the environment” (Harris 2016).
Looking at the accountability of responsible sourcing with a holistic approach is the traditional reaction. But therein lies a problem:
If Brand A’s supplier, Brand B, has unlawful child labor present in its the production of materials, sourced and purchased by Brand A (unknowing of the presence of child labor), sold to Consumer A (unknowing of the path to production), and consumed by Consumer, B, and C, there’s a lot of parties that have contributed to a case of irresponsible sourcing.
But what’s the headline read?
Brand A lacks transparency into the underbelly of the Supply Chain. Or, If you purchased a Brand A computer, you may be contributing to child labor?
Brands fall victim to these kinds of PR disasters day after day, but are they the only ones to blame?
Of course, global brands should be focused on achieving transparency into the actions of suppliers, vetting suppliers before selecting them, assessing their suppliers continuously, auditing when needed, governing their suppliers with relevant standards, and utilizing technological advancements to optimize risk reduction.
Simply, purchasing entities must take responsibility for the materials of purchase and be held accountable for those purchases.
But shouldn’t the other parties involved be as well?
Coming back to my definition of responsible sourcing, “it [responsible sourcing] is a business critical function in which, participating actors are equally accountable for the ethicality and sustainability”.
The responsibility of sourcing is a shared responsibility; a responsibility that must be demanded, governed, complied with, expected, standardized, and executed upon by suppliers, traders, manufacturers, logistic providers, purchasers, retailers, investors, employees, and consumers.
Responsible sourcing is a social contract, demanding all parties’ signatures in order to create true sustainable business development.
Until next week.
This publication is brought to you by author Sam Jenks, but also on part by Kodiak Rating — A Supplier Relationship Management SaaS functioning out of Stockholm, Sweden. Kodiak Community intends to challenge traditional business practices with innovative thinking and creation.
