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Collaboration in Supply Chains

16 November 2016 #Employment #Outsourcing & Supply Chain #Supply Chain Governance


Many multinational enterprises (MNEs) are challenged about how to keep their supply chain secure against human rights abuses and modern slavery risks. This is highlighted by the relatively inadequate public statements many large companies are producing about ther compliance with the Modern Slavery Act.

The importance of enhanced collaborative working with suppliers is that it may provide a more trustworthy system of engagement, to include the workforce of the suppliers. 

The challenge is how to make sure that a supplier is actually doing what they say, and one way to improve control is to have a method of workforce engagement that in fact encourages workers of the supplier to engage with the MNE itself as part of a forum concept. This enables some feedback to take place, some confidence to be built up, and probably over time the employees of the supplier would understand directly that the MNE really wants to know that workplace standards are good.

So the collaboration has to be taken beyond a dialogue between the MNE customer and the supplier, and taken to be a dialogue on a recurring basis with the workforce in a broader enagement agenda.

This ties also with a general objective of upskilling SME suppliers in HR matters, cultivating better practices, and enabling them to be successful partners to MNEs who are anxious for safe and reliable supply chains.

It has probably to be tied in to some management skills training to the suppliers, so that they also understand the objectives and messages.

This would ideally even extend through long term collaborative relationships to improved community engagement by the MNEs with the localities of their suppliers. This again would enable more feedback by and awareness of the workforce itself rather than just the supplier employer. It would also much improve cultural understanding, thereby also helping reduce risks of dangerous misunderstandings. In a workplace this may help address differences of approach regarding matters such as language styles, gestures, attitudes, religious beliefs and practices, and gender.

This takes the relationship beyond just a trading relationship to something more enduring and purposeful in working with the country where products are sourced.

The training needed for suppliers is not just how to avoid slavery or similar abuses, which may be quickly clarified, but also how to develop good leadership and management competencies, applying best practice, and understanding how the MNEs want their suppliers to be managing their employees.

This more proactive engagement approach would make a long term difference to what a supply chain means to the more vulnerable people in various tiers of the supply chain, and it may help build substantial loyalty and trust if well managed over time. Employees may feel by such added focus that they are known and valued as people, and that their well being is a definite objective of the supply chain.

In effect it is the export of the best practices of collaborative working, reflecting the forthcoming ISO 11000, which meets objectives of lifting standards and making sure that they are maintained at a high level.

It is arguably a critical element of the UK developing better trade links with the world beyond the EU that it should promote ways of working that will give it relative security and comfort on compliance while also developing better appreciation of the countries with which it must engage more significantly in years to come.

This also enables all suppliers to learn better what international standards from sources such as the UN and the OECD look like in practice, and indeed to show when appropriate why any particular expectations will not work in the local context, as may on occasion be the reality to accept and work progressively to improve.

This very much takes the supply chain agenda into the world of human resources and engagement, which may be for many businesses a mindset change, but this is the route to addressing the challenging workforce compliance issues in a proactive way for long term benefit to the integrity of the supply chain and improved global reputation of the MNE.

Michael Sippitt

Director

Forbury People

Clarkslegal, specialist Employment lawyers in London, Reading and throughout the Thames Valley.
For further information about this or any other Employment matter please contact Clarkslegal's employment team by email at employmentunit@clarkslegal.com by telephone 020 7539 8000 (London office), 0118 958 5321 (Reading office) or by completing the form on this page.

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