Applying Technology to the Ethical Supply Chain

There are many other companies that provide software in these areas, and many more just beginning to expand their traditional procurement, supply chain, ERP, and EHS platforms to incorporate this type of functionality in their suites. The combination of complex standards and reporting requirements, the importance of keeping auditable, easily available records, and the need to engage potentially thousands of suppliers from all over the world makes an Internet-accessed, integrated software suite very attractive to companies that are implementing standards, monitoring overseas suppliers, or are beginning to produce sustainability reports . There are several obvious benefits:

• Better Risk Management. As we have seen, over the past decade , as part of the supply chain revolution, companies have shifted responsibilities for materials management and production, whenever possible, to their supplier community. The early development of SCEM platforms reflected that shift in responsibility. Moreover, as companies continue to require suppliers to provide greater proof of performance ” fair employment, recycling, waste disposal, or materials sourcing policies ” company Environmental Health and Safety, supply chain, and risk management processes all begin to overlap. And, of course, supplier risk is not limited to only reputation or legal liability for poor social or environmental performance. These types of SCEM, EHS, and risk management platforms also help companies anticipate production and delivery interruptions or avoid surprise contract cancellations .

• Productivity Improvements. At the heart of any IT-based management system, of course, is quality assurance and productivity improvement. Much of the information that is channeled from supplier to buyer through these types of SCEM or EHS systems ” information concerning hours, wages , underage employment, safety records, incident or accident reports, environmental damage, fines, audit results ” can all help contribute to productivity improvements, reduce waste, or avoid costly fines . Recycling policies, cleaner production methods , prebanning of toxic or dangerous chemicals or materials used in the production process, improved energy usage, and efficiency by plant operations will all contribute directly to bottom-line savings.

• An Enhanced Reputation. Finally, given the pressures for better social-and environmental performance that companies now face, making a conscientious and well-organized attempt to manage environmental issues within the supply chain can only help an organization s reputation in today s environment. These types of systems not only make the process of supplier monitoring and social and environmental reporting easier for a company, but they also demonstrate genuine commitment, in that they provide the overall monitoring and certification framework and data collection capacity that can only really be achieved with a consolidated software platform.

Ultimately, of course, the success of these systems will depend on their capacity to absorb the various emerging standards, including ISO 14000 and SA 8000. They must also provide data integration and support for reporting initiatives such as the GRI, and will need to support companies of different sizes from many different industries. Possibly most important, as we have seen, these types of systems, and a supplierfocused program of social and environmental monitoring and reporting, will be most effective if the entire process is built into a company s strategic and everyday processes ” led by senior management, supported strongly by a CERO, and serving as a supporting structure for a company s ethical framework.

EMS software will move front and center once sustainability starts being-integrated into the broader suite of business performance metrics, concludes Carl Frankel, a consultant specializing in business and sustainability. That may seem a long way off, but it s on the way. ^{[13 ]}

^{[13 ]} Carl Frankel, The Future of EMS Software Depends on Two Types of Integration, EccoNet.com at www.ecconet.com/ecconet/CommunityChat/ spotlights /Archive/archive_emssoftwareCF.htm .