Corporate Social Responsibility (CSR) has been a hot topic for procurement departments in recent years. The supply chain is one of the main levers that can be used by procurement decision-makers to improve their CSR performance. Martin Berr-Sorokin also stands by this idea. He is founder and CEO of IntegrityNext, a company dedicated to monitoring the sustainability and compliance of suppliers. In his interview at the "Big Ideas Summit" event, he shared his perspective and best practices.
Monitoring the entire supply chain is essential
Procurement departments generally assess the CSR performance of a small number of suppliers, as this is a substantial and time-consuming task. In most cases, decision-makers focus on the most strategic suppliers, or the suppliers with the largest volumes.
Martin Berr-Sorokin is very clear: "So what are they doing, they are focusing on 80% of their spend, that's maybe 5% of their suppliers and they are focusing on that. But that's not enough, right? So you are blind to 95% of your supply base. You really have to get your arms around your complete supply base". »
As such, it is important to remember that supply chains are very complex and are not always transparent. Damage to a company's reputation can take many forms: health scandals, corruption, environmental damage, non-compliance with labour laws and human rights, data confidentiality violations, insufficient quality, blacklists and sanctions etc.
Most importantly, when a scandal breaks, remember that the reaction of the media and the public will be the same whether the supplier is tier 1, 2 or 3 for the company in question.
Using technology to assist with audits
As procurement departments do not have the resources to evaluate their entire supplier base on a regular basis and using more traditional methods, technology can assist them.
Martin Berr-Sorokin adds, "you cannot do it manually, you cannot do your on-site audits three times a year for thousands of suppliers. That's not possible and nobody is willing to pay for it. So use technology to get transparency and if you have findings then do your desktop audits, then do your on-site audits. But start with technology, get full transparency and then act if you have findings". »
A standardised and scalable approach is key. Once this is applied to all suppliers in a company, it is up to the procurement department to identify supplier risks, then use its internal resources efficiently to learn more about these risks and take action if necessary.
Now, by assessing your entire supply chain, you also guarantee the strength of this network of partners in the event of a crisis, and as a result, the longevity of your own company.