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It has long been true that if a supplier wants to sell to a customer, there are certain conditions that must be met before that sale can take place. While each buyer has their own specific requirements for suppliers, they traditionally have fallen into three categories: price, quantity, and lead time. If a factory could not meet these requirements, they would not receive the order.
While these pre-conditions continue to be just as important today as ever to buyers (i.e., brands and retailers), in recent years, a new imperative has been added to that mix. Gone are the days when buyers had the simple attitude that suppliers must “comply or die” with their social responsibility Codes of Conduct. Today, more and more buyers are insisting that suppliers demonstrate social compliance before they even consider placing orders. That means that suppliers must objectively demonstrate that they are abiding by the principles of ethical manufacturing, including treating their workers fairly, paying proper wages and benefits, ensuring working conditions are safe and healthy, preventing forced labor, child labor and harassment, and ensuring workers have the right to collective bargaining.
Today’s responsible buyers are going even further. They know that while there always will be a place for the social compliance audit (because certain things need to be measured), auditing alone is not (and never will be) enough to ensure lasting change. Responsible buyers know that they need to use their limited resources more efficiently in order to shift from solely auditing to capacity building and to more substantive remediation of persistent problems and non-compliances.
To achieve this, increasing emphasis is being placed on longer-term strategic relationships between buyers and their suppliers. Already, many are working together to achieve efficiency improvements, not only in manufacturing processes, but also in all management systems. Plus, compliance with environmental laws and regulations are also becoming sourcing imperatives.
Considering these sourcing imperatives, social compliance certifications have become an important aspect of supply chain management. Certifications, like WRAP’s, can help buyers ascertain the level of compliance within their supply chains while also helping suppliers demonstrate that they actually are ethical and responsible partners. A properly implemented and credibly certified social compliance system serves the dual purpose of meeting buyer requirements and increasing worker efficiency and morale, which in turn, helps increase productivity and profitability.
These expanding and evolving sourcing imperatives cannot be ignored in today’s highly competitive global market. Those buyers and suppliers who remain mired in the “old ways” of sourcing soon will find themselves left behind!
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