Lawful Business: The Importance of Responsible Sourcing

It’s part of the clothes you wear and the food you eat. It’s what makes the coffee you drink each morning and the diamond ring your mother wore. Everything comes from somewhere, and is touched by many hands all over the world. Responsible sourcing, also known as supply chain responsibility, is a voluntary commitment made by companies to take into account the social and environmental impact that their supply chain has on the world around them. In a market where consumers are becoming more environmentally and socially aware, it is important for companies to provide total transparency now more than ever, in order to build business legitimacy and gain the trust of enlightened shoppers worldwide.

Irresponsible Sourcing: Why It Hurts

Irresponsible sourcing negatively affects our planet, health and workers. According to this article from The Guardian, “the retail manufacturing industry is the second most polluting industry on earth, second only to oil.” Overconsumption expert, Annie Leonard also reveals in this article that, “only 1% of the materials used to produce consumer goods are in use after six months of sale.” Considering the pollution and waste that the supply chain is responsible for, it is important for companies to choose manufacturers that deploy sustainable practices, ensuring the least amount of environmental impact. Apart from environmental impact, companies should also consider the effect that neglectful sourcing has on people. We’ve witnessed these social impacts. From restaurant contamination to unsafe workplaces, mismanaged supply chains can lead to widespread infections and may put companies under fire for unethical practices regarding human rights. Carefully choosing production and distribution organizations, establishing expectations and regularly checking that they are complying with codes can prevent these harmful disasters from hurting people and our planet.

The Benefits of Responsible Sourcing

Taking charge of responsible sourcing has many benefits for both business and environmental sustainability. While it does require a little extra effort, it ultimately results in both money savings and boosted sales. Through efficient and ethical supply chain management, companies save money by saving resources, such as water and electricity. This puts more money in company pockets and helps to establish sustainable business. American retail giant, Target, is living proof of the sales success of responsible sourcing. According to this article, after launching their Made to Matter collection of sustainable products, Target saw an increase of more than $1 billion in sales in one year. Similarly, Everlane, a fashion company committed to ethically sourced and priced goods, is reportedly valued at $250 million, a quick and high rise from its humble beginnings in 2010. Companies like Target and Everlane have done the research. They understand that the consumers are changing. They know that people want to support ethical brands to make better choices for themselves, their families and the world they live in.

Responsible Sourcing Made Easy

With various regulations and standards to navigate, and the fact that most companies have multiple supplier relationships to manage, the easiest way to keep it all straight is through sourcing management software. Using a digitized system streamlines the process, making it possible for companies to build a strong client-supplier relationship to promote responsible sourcing at all business sites. Gensuite offers supply chain management through their Responsible Sourcing program, a suite of cloud-based software applications. This supply chain management system allows users to establish supplier profiles, create an inventory of supplier profiles based on geography, risk priority and requirements, utilize the suite’s mobile capabilities to complete supplier audits based on program needs and more.

One global manufacturer with a diversified portfolio of over 35 businesses turned to responsible sourcing software to digitize the management of their supply chain. The company discovered that over 1,000 of their suppliers were identified as a potential supply chain risk. And, while they had a global staff ready to support the management of these suppliers, a digital solution was needed to streamline the effort. Gensuite’s Responsible Sourcing program provided one platform to complete all supply chain management related tasks at their global locations. This provided team-wide visibility to the results of supplier audits, compliance and trends. The company launched Gensuite’s Responsible Sourcing program, leveraging the suite’s mobile capabilities, to schedule and conduct audits at supplier locations, with preliminary risk review and integrated corrective action tracking. Using Gensuite’s Dashboard, the company was able to track their improvements across all business sites, and resulted in 100% corrective action completions at their global supplier locations. By choosing to deploy Gensuite’s Responsible Sourcing software to streamline their large-scale supply chain management, the company drove corrective actions to closure across their global facilities, effectively lowering their supply chain risk.

At face value, it might seem that cost and speed would take precedence over ethical practices when it comes to business. But, as today’s consumers take an increasing interest in company transparency, it is important for business leaders to efficiently manage their supply chain and effectively implement responsible sourcing to keep up with the current market. Implementing legitimate business practices also promotes better working environments, less pollution and keeps communities healthy. Use responsible sourcing software to streamline supply chain communications and tracking, making it easier to manage supply chains responsibly.

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