The debate concerning ethics versus profits is still ongoing for organisations worldwide.
Companies have to balance the corporate social responsibility (CSR) effort in building sustainable supply chains with the realities of cost-effective supply networks and higher profit margins.
“Companies may talk about ethical supply chains, but if they don’t independently monitor and audit suppliers, nothing will change,” explained a UK-based industry research head at a procurement network in an opinion piece for The Guardian penned several years ago.
Fast-forward to 2017, and there is still much concern about the right implementation of ethical supply chains, and for compelling reasons.
Ethical supply happens when organisations look beyond the bottom line and lowest prices in supply networks and consider quality, safety and ethical sourcing of products. Companies cannot just consider associated costs in the supply network.
It does not mean that ethical supply has to forfeit profit, as eco-certified and green businesses such as Lush or The Body Shop testify with their financial success.
The biggest challenge for large companies is the handling of massive supplier networks that make it difficult for effective communication, data sharing and information transparency to occur.
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Even so, there are a number of steps organisations can take in successfully addressing the sustainability of their supply chain network:
- Corporate social responsibility (CSR) should be declared a priority in supply chains
- Organisations willing to embrace sustainable procurement should first ensure that their suppliers have an ethically sound CSR policy
- Communication between purchasers and suppliers in the company’s supply chain network should be clear and transparent
- The supply chain should be easily reconfigured and integrated into an effective management system that oversees best practices
- Organisations should be prepared to monitor performance through regular effective audits performed on suppliers
Sustainable supply chains built on environmental CSR policies and green practices offer a whole range of benefits from increased efficiency to less waste and reduced costs.
Lastly, ethical supply has a positive impact on marketing initiatives and ethical consumption.
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