Training Company Monitors
It is important to remember that monitoring is not the same thing as auditing. Monitoring includes an element of guidance, cooperation, and improvement. An audit comes later, and is a formal process for determining compliance that should usually be conducted by an independent third-party.
Again, all of the major emerging standards ” SA 8000, ISO 14001, AA 1000, the ETI ” will provide training for member company s staff, which will include discussions on the codes themselves , along with other important background information on labor and environmental policies for different regions and countries , and best practice techniques for monitoring and dealing with noncompliance issues. Social Accountability International, for example, provide the Corporate Involvement Program, which helps companies evaluate the SA 8000 platform, implement the standard, and then create an SAI- verified public report for stakeholders. The program includes training for managers, suppliers, and workers, and provides implementation assistance and access to a best practice supplier database.
Survey Techniques and Questionnaires
As we have seen, there is no substitute for on-site visits , but in order to begin the formal documentation process, nearly every supplier will still need to be sent a self-assessment survey as part of the supplier monitoring program. Some standards provide those questionnaires as part of membership, although there is some concern about the value of a one- size -fitsall type of survey, particularly as specific questions may be needed in particular vertical industries to really understand a supplier s social and environmental performance.
There may be little procurement value, contends GEMI, in conducting a one-size-fits-all comprehensive supplier survey asking many suppliers questions about many aspects of EHS performance. Such a survey is not adequate to minimize legal liability, is overkill for purposes of protecting reputation, and is not particularly effective as a means to stimulate supplier commitment to continuous improvement. [12 ]
Over the past several years , many companies have chosen to develop their own supplier questionnaires, both as part of the prequalification process, and increasingly, as a part of ongoing supply chain monitoring. For example, AMD, the electronics manufacturer, has developed both a general questionnaire for all suppliers, and a second, more commodityfocused questionnaire for their chemical suppliers. These questionnaires focus on environmental health and safety issues, and request information on reporting, staffing, and document retention policies and procedures.
We really use our surveys, says Rich Weigand, director of Environmental Health and Safety at Advanced Micro Devices. We don t just file them. The company carefully reviews supplier responses, with a dedicated team evaluating each supplier for strengths and weaknesses, then ranks them according to their responses. Suppliers that fall below a strict numerical threshold are then put on probation or removed from the supplier list. AMD now has extended the survey program to both European and Asian suppliers. [13 ]
Twice yearly, H&M is organizing workshops for the inspectors and other key people in the production offices. These workshops are further education for our inspectors with the purpose of exchanging best practices in different areas. Supplychain topics such as worker interviews, overtime, network building, piece-rate systems, migrant workers, work methodology, and statistics are addressed. In 2002, the workshops were held in Phnom Penh, Cambodia for our East and South-East Asian inspectors and in Istanbul, Turkey for our European inspectors.
HP provides a good, straightforward example of a first-level supplier questionnaire (see Figure 13-1).
Figure 13-1: Sample Code of Conduct Questionnaire
The problem with questionnaires and surveys, of course, is that as companies have become aware of the need to better understand supplier policies, suppliers throughout the world have found themselves suddenly inundated with questionnaires from sometimes hundreds or even thousands of buying companies ” or potential buying companies ” none of whom have attempted to coordinate their efforts in any way. Moreover, suppliers complain of company surveys written by legal counsel with hundreds of questions, many of which are redundant or ask for information that has no obvious use. This new workload, and the fact that selfcertification does not ensure that a supplier has the policies in place that it contends it has, has meant that companies need to begin to approach supplier surveys in a more coordinated and systematic way.
There can be twenty auditors coming into an individual factory, says John Brookes, which, apart from everything else, [can be] very disruptive . . . Therefore they [suppliers] are quite keen to get the single, internationally recognized certification from an independent body in lieu of these multiple customer audits ” different standards, different requirements, different expectations . . . [14 ]
Moreover, as many suppliers and industry analysts have warned , questionnaires should not be sent out as if they were the monitoring process itself. It is important to remember that surveys and questionnaires are most valuable not as an absolute assessment tool, but as a way of initially identifying potential supply chain problems and better understanding a supplier s basic profile in terms of social and environmental policies. Therefore, they should not necessarily be designed to gather huge amounts of information or to serve as part of a compliance assurance policy. A good questionnaire is most helpful if it provides the type of information your company needs in order to prioritize suppliers, and to highlight the need for site visits and a higher level of monitoring of potentially risky, but important, suppliers.
This is one of the more important reasons, of course, why companies are driving toward a standardized process, both in terms of questionnaires and surveys, and also in terms of certification. Standardization allows suppliers to move through a single certification process, or to use a common response to survey questions, reducing its workload and ensuring consistency among questions and answers. Moreover, once a buying company has committed to an international standard, suppliers have a much greater incentive to take self-certification, and self-improvement of their processes, more seriously, since inspections and audits are much more likely.
There are several leading practice techniques to consider when developing a survey:
The level of detail and complexity of questions should reflect a supplier s importance and risk ranking. There is no point sending out comprehensive surveys to spot market vendors . For suppliers of low or medium priority it is often best to simply ask broad, revealing questions such as, Do you employ workers under the age of 16?, or Have you received certification by any major social or environmental certification group ?
Included in the survey should be permission to inspect the supplier s site for verification.
Phrase questions, whenever possible, so that the supplier can provide a short qualitative response, or a simple yes or no answer. If a question requires a more lengthy answer, it is often better asked in an interview.
Questions should be as straightforward as possible in order to avoid misinterpretation. [15 ]
[12 ] New Paths to Business Value, op. cit., p. 38.
[13 ] AMD Case Study at www.usaep.org/scem/case1.html (still under construction).
[14 ] Interview, August 15, 2003.
[15 ] New Paths to Business Value, op. cit.