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Making the most of your spending power

You can do it buying a printer, choosing your loo paper or even engaging a lawyer. Use your dollars to buy products and services that help the environment, provide fair labour conditions and aren’t cruel to animals.

If you think it doesn’t apply to you, you’d be wrong. Every organisation needs a basic supply chain strategy to avoid being associated with bad practices. As values-based companies outperform their competitors, it’s becoming necessary to retain good staff and customer credibility.

And if you're dealing with government and some not-for-profits you'll notice they increasingly require evidence of an ethical supply chain. I came across three examples in my work in the last month.

Government tender requirements

When I was helping a Melbourne law firm with a tender for the Victorian government last month we found a new requirement to detail ethical purchasing practices in the supply chain. It reflects Victorian Labor’s commitment at the 2014 election to use the government’s purchasing power to set high standards for business practices and ‘ensure workplaces are fair and safe.’

A medium size Australian law firm is likely to have fair work conditions for their staff. But you wouldn’t expect them to have paid much attention to the origins of their printers, computers, software and stationery. A quick search of law firm websites shows supply chain policies along the lines of ‘We strive to purchase from suppliers that adhere to fair trade and ethical business principles.’

A vague motherhood statement like this, on its own, is about as convincing as PM Tony Abbot’s comments on the Adam Goodes booing controversy. To meet a basic credibility test you need to be prepared to find out about your suppliers’ labour conditions and environment record.

The Australian Legal Sector Alliance, an industry-led body promoting sustainable practices in the legal sector, is helping firms to improve their practices. They’re developing model procurement policies and draft supplier questionnaires to ‘help [firms] reduce the impacts (and risks) inherent in buying stuff’. A wise firm would recognise supply chain issues as part of risk management, as my client did.

Anti-slavery provisions in Californian law

Tracking and auditing your suppliers is a much bigger issue for manufacturers and retailers of consumer goods. As an assessor for Good on You I’m always on the look out for companies that show they care about the people and places where their goods are made.

Last month I assessed Coleman, an American company famous for it’s camping equipment and owner of Esky®. It’s a subsidiary of Jarden, well known for its home wares and consumer goods. With suppliers from Vietnam, India, China, Mexico and South America they have a global reach.

Jarden's social compliance program says they won’t do business with suppliers who practice human trafficking, slavery, forced labour and child labour. Their Code of Conduct requires suppliers to abide by fair and humane employment practices, provide safe and healthy working conditions, pay the minimum wage and provide annual leave. Jarden conduct audits and random site visits to verify compliance with their standards and to rate the performance of their suppliers.

Coleman's website cites the Californian Transparency in Supply Chains Act which requires high turnover companies doing business in California to publish a statement about their efforts to eradicate slavery and human trafficking from their direct supply chains. Over 500 companies that are subject to the Act have published statements since 2012, when teh law came into effect according to advocacy group KnowTheChain. Neither Jarden nor Coleman are covered by the law but they seem to want to be in the good company of businesses that are.

Power in numbers

At our not-for-profits CEO forum last month some environment NGOs started talking about forming an ethical purchasing block. It’s not a new idea - not-for-profits in health and aged care have had sectorwide procurement policies for years. But now even small social justice and environment NGOs are looking for a way get better value for money and ethical supply chains for the sector.

As for your choice of loo paper, the clever folks at Who gives crap produce a product that’s good for the environment and good for your bum. What’s more, they give 50 per cent of profits to WaterAid to build toilets and improve sanitation in the developing world. Now that's what I call a supply chain!

Helping you to make it better

I can help you maximise the impact of your purchasing power and gain the kudos of having a credible procurement and supply chain strategy. As an assessor of good supply chain practice and a former government insider I know what gets results. It might even save you money.

If your supply chain policy needs a check up get in touch with me here

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