The Stanford Initiative for the Study of Supply Chain Responsibility (SISSCR) – a consortium of organizations dedicated to examining the relationship between maturity in responsible supply chain (RSC) practices and supply chain performance – recently released a whitepaper on ‘Maturity in Responsible Supply Chain Management.’
The research questions examined in the whitepaper include:
- What supply chain practices do buyers (i.e., purchasers of materials and services) employ that they believe have a positive impact on social, environmental, and ethical performance?
- Can we develop a framework to assess the relationship between maturity in RSC Practices and supply chain performance?
Three topics of focus were chosen to examine this relationship:
- Excessive working hours (related to social responsibility);
- Hazardous materials (related to environmental responsibility); and
- Counterfeit components (related to ethical integrity).
For the research, the team interviewed multinational buyers and suppliers in the electronics industry and also reviewed academic literature and best practices from a range of industries.
Counterfeit components are not usually included in supplier responsibility codes of conduct however intellectual property (IP) issues are closely aligned with other key supply chain integrity issues such as product safety and conflict minerals. The research team noted that “the protection of intellectual property (IP) in the supply chain is an emerging area of research and business concern. Examples of IP issues in the supply chain include counterfeiting, software license non-compliance, and trade secret theft.”
The research focused on three areas where buyers can engage in responsible supply chain practices. The categories and key findings include:
- Management systems: policies often include only base minimum legal requirements and are not uniformly communicated across the supply base and with suppliers and managers; these practices can lead to confusion.
- Methods to increase supply chain visibility: among other highlights, the research suggests that audits don’t identify the ‘root cause of a problem,’ and as such, recommend ongoing monitoring to provide a view into practices.
- Actions to improve social, environmental, or ethical performance. The research recommends implementing a follow-up plan when there are violations; addressing root causes of non-compliance; developing an end-to-end focus; collaborating across and within industries to improve supplier practices; and finally, using a ‘commitment model’ to develop supplier capabilities, rather than simply auditing compliance.
CREATe is a member of this SISSCR program, along with other sponsors including Cisco, PwC, Microsoft, Intel, Ryder, EMC and research partners MIT and Business for Social Responsibility (BSR).
CREATe is working with companies and their suppliers and business partners to help improve management systems for protecting intellectual property and preventing corruption. To learn more about CREATe Leading Practices or request a demo, email us at info@CREATe.org.