Q&As: Risk Management and Resilience in Supply Chains

Our webinar Risk Management and Resilience in Supply Chains, highlighted as an issue the increasing complexity and vulnerability of global supply networks in the face of geopolitical tensions, climate change, and emerging regulations. The session featured expert insights from our team, alongside a live Q&A with attendees. The below is a summary of the Q&A section of the webinar; for the full session summary, click here.

Could you give some more information on the evidence that suppliers might be asked to provide? Is it something that they are already expected to have access to, or could it be establishing a new policy or approach to data collection? 

Generally speaking, the evidence requested will be relevant to the supplier. An example of this would be a grievance mechanism. Suppliers would be asked to give an overview of what is involved, to provide a copy of the documentation, and evidence of the procedure that sits behind it. They may also be asked to provide data on cases. 

Where suppliers are missing a required policy or other operational consideration, companies should bring suppliers along on a process of improvement. Start from a clear explanation of what they are expected to have as a baseline, and then move into establishing new policies and collecting new data to move progress. 

For us, a key part of the process is this corrective action and continuous improvement element. Suppliers are not expected to be perfect off the bat. As a minimum level, our platform requires suppliers to evidence claims. That means, for example, that asking for a supplier code of conduct can lead to further action. If you just get back three bullet points, then you will need to engage and understand how to improve within that supplier’s context. 

Addressing the first circle of suppliers is generally “easy”. How do manage the due diligence with the sub-suppliers and further down the supply chain? 

This is absolutely much harder to do than suppliers you have a direct contract with. We have, however, found that it is very possible, just a much slower process. 

You will need to map your full supply chain, through engagement with your tier one suppliers. The next step is then to establish contact through your tier ones to actors further down the supply chain. 

At the same time, your first line of defence is always going to be looking at what tier one is doing. Are they cascading standards down? Do you trust that they are monitoring them? In doing this exercise you may also find you need to change some of your T&Cs, to reflect change for tier ones, as well as those beyond them. 

I understand these regulations are globally applicable, but in many cases we find it difficult to implement locally considering different environments. 

We’ve seen a lot of pushback with regulations like the EUDR, standards that are being produced in the EU, but extend globally. We have seen from our work with clients in South Africa – and the African continent in general – that there is a feeling that the laws do not take local contexts into account. 

There is a need for flexibility, but it remains to be seen whether the laws will allow for that. 

The reality is that somehow, companies have to start getting comfortable with how they will evidence what they are doing. It’s certainly not easy, but done right companies can avoid negative impacts on people and planet – which is valuable not just from a compliance perspective, but also from a business competitiveness point of view. 

It’s important to bear in mind that all this does have a value creation aspect, which isn’t brought out enough. Whether that’s on a customer level, or for talent retention, or even to open up your applicability for tenders – something we’re seeing right now in the UK, for government-level contracts.