Now more than ever, an organization's reputation is defined by how it executes sustainable practices. Supply chains typically receive scrutiny in this regard, attracting attention from consumers and potential business partners alike who want to associate themselves with socially and environmentally responsible brands.
While conducting assessments of prospective suppliers, procurement professionals often scrutinize how well or poorly companies indoctrinate sustainable standards throughout their operations. Those that skimp on safety protocols or blatantly neglect their impact on surrounding ecosystems are written off as a risk and not considered. Even if a supplier is contracted, the purchasing department continues to analyze its practices throughout the duration of their accord.
The birth of the EHS manager?
Given this approach to supplier relationship management, it's a wonder whether or not enterprises are creating environmental, health and safety positions within procurement departments. According to the National Association for Environmental Management, an EHS manager oversees internal and external operations to ensure all suppliers and staff are abiding by national EHS regulations in addition to supporting progressive environmental policies and worker safety programs.
Surprising to some, EHS managers often started out as engineers or scientists. This provides them with an advantage of sorts, as it allows them to scrutinize manufacturing, chemical sourcing and processing operations from a technical perspective. Combine this unique expertise with knowledge of industry best practices and government policies and you have yourself a valued contributor to a supply chain management team.
Extending to every facet of the supply chain
Manufacturing Business and Technology contributor Paul Leavoy acknowledged the time when EHS compliance requirements only applied to organizations procuring goods from overseas enterprises - companies were not held accountable for the actions of their suppliers. While current EHS obligations remain quite confusing in this respect (standards may change depending on which industry you're referring to) public perceptions have motivated organizations to rigorously scrutinize every entity in its supply chain for environmental and workplace negligence.
Never underestimate the convictions of a knowledgeable consumers. Social media has connected people from all over the world in a way businesses didn't anticipate in the past. Facebook, LinkedIn and a plethora of other platforms have created a global society that values the livelihoods of those living in different parts of the world. If abominable labor conditions, rampant pollution and negligent waste is persisting as a result of a company's supplier practices, the procuring enterprise will receive just as much criticism as its partner. This goes beyond disparaging Facebook comments and ventures into the realm of informal boycotts.
Improving EHS adherence
Businesses looking to maintain profitable, ethical supplier relationships must take a number of steps to ensure every entity within their supply chains possess the same values as their own. Leavoy recommended that creating an EHS position or sub-team within a larger procurement department is a step in the right direction. If a group of people can dedicate 100 percent of their time to maintaining EHS regulatory compliance and supplier sustainability assessment, thorough partner profiles can be developed and referenced as needed.
From there, enterprises must consider constructing a comprehensive supplier EHS review process comprised of the following steps in mind:
- Interview nonprofits and private enterprises about a prospective supplier's operations. Does its leaders proactively find ways to integrate sustainability into their operations?
- Visit facilities and interview laborers as if you're a government figure conducting an audit.
- Ask the prospect whether its managers would be willing to submit regular EHS reports if an agreement is established.
These measures are simple to take. In the long run, companies will be able to develop a portfolio of suppliers they can hold accountable. Consistent reporting will further solidify a brand's stronghold over its EHS efforts.