Three key functions of supply chain ethics management

Filed in archive Practical Tips on July 22, 2008

As you know, compliance is a hot topic these days especially in the area of sourcing and PLM as these are the areas which the process of decision making on the type of material to be used happens.

The new attention motivated me to go back and highlight some of the points which Michael R. Levin mentioned in his article "Building an Ethical Supply Chain" in Supply and Demand Chain Executive.

In Levin's point of view, SEM (Supply chain Ethics Management) platforms provide three key functions from risk management perspective:

- Distributing a company's code of conduct and updates to suppliers
- Documenting supplier receipts of these requirements
- Facilitating two-way communication between a company and it suppliers on topics regarding ethics and compliance.

The important point here is the term "risk management": These elements ensure that the danger of compliance problems become minimum for the company but the more important thing is to create a situation where the problems won't happen in supplier base either. That's why some companies conduct compliance management education as they start a relationship with a new supplier. Conducting regular and unexpected audits related to compliance by companies such as IKEA has the same purpose.

I appreciate if you also share your thoughts on the cornerstones of an excellent compliance management platform in supply chain.