Especially since the 1990’s, modern manufacturing involves sourcing components, technology and design input on a” global village” basis, aspects such as political relations, sanctions, human and workers’ rights, trade wars, hot and cold wars all impact Procurement.
Over the last twenty years or so, Procurement has gained a strong influential role regards influencing the organisation concerning social responsibility and compliance within its supply chain.
This post focuses only on highlighting some primary areas of moral accountability, (excluding obvious issues such as Bribes, Nepotism etc) effecting the Procurement Professional such as:
- Human and worker rights (which includes upstream and downstream).
- Carbon Emission Commitments and other environmental, social and governance commitments.
- Transparency throughout the Supply Chain and Manufacturing Processes that concentrates on transparency with all stakeholders but should be “worker centric” which is more than often overlooked.
- The hidden costs of overzealous bargaining and quoting on end services and products.
- “Cradle to Grave” product management, which is becoming ever increasingly important.
- Legal/Legislative Compliance and Adaption
- Building sincere long-term relationships with suppliers to achieve quality, ethical and moral supplier goals.
To navigate these obvious challenges, clear oversight rules need to be emplaced that will provide governance and guidance to all team players that would include:
- Open Communications strategies for all internal and external relevant parties
- Codes of Conduct and Accountability Guidelines that outline the management of all critical moral and ethical responsibilities
- Due Diligence Programme on Vendors and prospective vendors.
- A bespoke automated Supplier Sourcing and Contract Management system that is not just cost and profit driven.
- Training for all Procurement team players, no matter ranking order.
- A Reward Programme for both buyers and vendors that factors in ethical and moral accountability
- Most critically, continuous and diligent management of such ethical and moral areas of concern
Building and managing a morality and ethics-based programme in Procurement is not an easy undertaking for many reasons. It is also often regarded as of no or little importance, as has been my more than common experience.
Ethics and Morality can only be sustainable within Procurement thru diligence and perseverance and dedication to the task.
Karl Furrutter and Furrutter & Associates are a Strategic Procurement and Liquidity Consulting Practice. Karl has thirty years of cross industry experience within Strategic Procurement and is focused on developing bespoke strategical solutions tailored to each customer’s unique requirements.
Contact Karl on karlf@furrutterandassociates.co.za or visit Furrutter & Associates at www.Furrutterandassociates.co.za