Sourcing and procurement departments have been going through numerous changes in recent years, with the shift to a strategic model being perhaps the most notable. The general theme of the evolution within the role is that while companies once called upon these individuals to manage contracts and negotiate prices down, today's positions are far more integral to overall operations.
"It's not worth pursuing the lowest possible price for goods if it comes at the expense of unethical practices."
Letting supply chain leaders take a more active hand in finding and working with suppliers from an early stage means these departmental heads can put their data to good use, informing the business as a whole and guiding decisions in a new direction. Sometimes, that effort involves adding new variables to how partners are chosen. For instance, it's not worth pursuing the lowest possible price for goods if it comes at the expense of unethical practices.
Awareness and ethics
According to TechTarget, ethical sourcing decisions are becoming relevant from a number of perspectives, including reputation management. Consumers have become committed to dealing with businesses that set and live up to moral standards. This reality means that a failure to adequately vet a new supplier could be a disastrous decision down the line, as inhumane practices are sometimes present throughout the supply chain. Companies that are found to have contracts with companies that have criminal labor standards or cause damage to nature may suffer image damage.
Today's procurement departments have to complete the tough task of obtaining their goods from sources that live up to high moral standards. With supply chains stretching around the globe and professional conditions different from one region to the next, this is a role for deep research by the sourcing department. These departments can lay out inviolable standards of conduct to partner organizations, and in cases where suppliers are out-of-line with those rules, large organizations can work on new training programs to directly influence conditions.
Companies that have access to large databases can use analytics to help them navigate the world of ethical sourcing. TechTarget explained that this is a risk management issue, falling into the same category as preparing for a natural disaster or a man-made supply chain disruption. When suppliers violate codes of conduct, the companies they deal with will feel negative effects.
A new role
Indeed, getting a company's moral compass pointing in the right direction is such an important operation, professionals dedicated specifically to this task may soon be commonplace. TechRepublic named ethical sourcing officers among 21 job titles that could be widely used within the next few years. These employees would be coordinators of teams who ensure the business's moral standards are universally understood - and being met.
From customers to workers to leadership, there will be many sources of input that will inform a company's moral code. TechRepublic explained that when organizations have ethical sourcing officers, they gain professionals who are dedicated to turning values into actionable priorities, and then inspecting the supply chain to ensure such ideals are being upheld. The company's contracts should also be open to scrutiny to make sure the business is living up to the standards it demands of suppliers.