Uncategorised

Ten simple steps to supply chain CSR engagement beyond audits

I do quite a bit of training work with small and medium sized companies from across the EU on CSR.

Last week I was in Brussels with 15 retail supply chain and CSR executives from Germany, Denmark, Finland, the Netherlands and the UK, for example.

The training I lead (workshop facilitation is perhaps a better description) is on a variety of issues.

For example, how CSR managers can engage boards, managers, business unit heads, NGOs, media and suppliers, on CSR and sustainability.

These firms are anywhere from 30 to 5,000, 10,000 or even 20,000 employees in size. It really varies. The word medium depends on how you define large of course.

Not all of these firms have NGO campaigners or the media chasing them on corporate responsibility issues. Many, particularly the smaller firms, are only familiar with a compliance agenda, for example on supply chain issues.

Some companies do have issues that need managing, of course.

Last week during one training session we used the collective knowledge of a group of managers to try and come up with some ideas as to how to tackle a particular challenge one company is dealing with. We didn’t solve their ongoing issues, but we certainly helped define some ways in which they could work on them.

But many participants in the workshops I lead, from smaller/small-medium companies, in particular, often ask how they should build interest and awareness in corporate responsibility issues when there is little pressure on them to do so.

This is particularly true in supply chain engagement, where company management doesn’t see a need to go beyond basic audits.

So, how do you build CSR awareness, policy, action and follow up when there is campaigner pressure, no direct industry pressure and no real board interest beyond compliance in your business?

(I refer to CSR here because that is still a far more common job title than ‘sustainability’, in small/medium/large businesses across the EU, in my experience)

Here are some tips that I’ve used and refined over quite a few training sessions, and tested against some sceptical managers who often have bosses that just don’t think the agenda matters.

They are very supply-chain specific, and are not guaranteed always to work, but are among the best I’ve found so far:

1) Take ALL the jargon out, immediately. Talk about the business case instead: Hiring and motivation, sourcing risk management, business partner demands, early warning systems for incidents (factories being burnt down by workers or shut down by Governments), saving money in production and distribution costs, becoming a preferred supplier to bigger companies, etc.

2) Start with something simple: Can a waste audit or removing waste bins in the office in favour of centralised recycling bins lead to a start of an efficiency business case? Start a small internal pilot with employee-led champions and expand it. Plant the seed of money saving alongside any ‘greener’ benefits.

3) Map the issues in your suppliers that lead to non-compliance. Make the links clear between badly-run factories and failures to pass ethical audits.

4) Base your supplier approach on a four tier strategy: Firstly, legal compliance, secondly, saving money, thirdly making more, fourthly, leading the industry and becoming recognised for it.

5) Select a pilot factory or two, and help them improve their business operations. In return, ask them to track progress and report the numbers to your quarterly.

Track these savings over a year, and show how better management = greater productivity = less forced overtime/safety incidents = saves money = leads to happier, retained workers = money generated by savings, which can be used to offset less working hours for workers = supplier pride in implementing the four tier strategy above.

6) Tell stories of competitors and others getting it wrong: Use examples of better risk management around reputation preservation and the impact on employees. (outside experts, like me, can help)

7) Don’t neglect the higher level business opportunities for your board and senior managers: Better relationships with factories who made have increased domestic demand (China), and being seen to lead the industry (earning bragging rights, which really matters)

8) Go find NGOs who can help you manage risk. Don’t wait for them to come to you. At a local level in the countries of supplier factories, ask the local offices of bigger NGOs who you should speak to locally, then get to know some key people who can tell you which local factory owners have a good reputation, and which don’t.

9) Understand the political risk in sourcing countries. Which have a particularly febrile atmosphere, and may change the way you buy at short notice, or who you can buy from. Could a Trade Union partnership help you manage risk? (Here’s another example, with some results)

10) When visiting suppliers, meet your national chamber of commerce in-country. What can they, or should they, do to help you? What about other organisations which you might be part of, consider the resources they may help that can help you understand risk, and solutions to it.

There’s no magic bullet to tackling CSR apathy in any company. A good CSR manager uses a whole variety of the above methods and many others to build awareness, policy and action.

The key message here is that it must be linked to improving business operations and areas that other managers and particularly bosses, respond to.

Telling your head of supply chain that you can help them and their team get a bigger bonus because of shared efficiency savings and fewer ethical breaches in the supply base will go a long way in getting, and sustaining, their attention.

These are not all the methods I’d suggesting using, but some of the most effective ones. There are others out there of course.

Readers who’d like to discuss CSR training/workshop facilitation for their business can contact me at toby.webb@stakeholderintel.com

3 Comments

  1. Interesting piece. Eventually worked out the Corporate social responsibility bit.. I suspect this would fit into more areas than just supply chain..

    john@biznetworkguy

  2. I believe it is important with a documented and structured approach. I.e try making a policy, guideline, charter or strategy explaining to suppliers/buyers:

    1) What Responsible Procurement means to the company
    2) How you will work with the suppliers
    3) How the responsible sourcing process will look like
    4) What you expect from your suppliers
    5) What you expect from your buyers

    The change management process in Responsible Procurement Management/Supply Chain CSR is very important. Learn more about my approach at: http://www.responsibleprocurement.dk.

  3. I would add :
    – Implement root cause analysis: there is nothing more important than understanding the roots cause of non-compliances …
    – Challenge internal procurement practices. Last time changes in orders, long payment terms, lack of planification are often impacting negatively suppliers !

Comments are Closed

All rights reserved @ SustainableSmartBusiness

LinkedIn