Why effective strategic sourcing should also be sustainable sourcing

An enterprise software expert has cast new light on key procurement functions, such as cost…...

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An enterprise software expert has cast new light on key procurement functions, such as cost reduction and strategic sourcing, moving them beyond solely financial measures as a result.

Procurement professionals work to understand spend analytics, drive cost reduction, and implement strategic sourcing, but Justin Dillon, CEO of supply chain transparency platform provider FRDM, believes they need to add another dimension to their calculations. As reported this week in Forbes Magazine, Dillon believes that if your supply chain contains forced and slave labour, the reputational damage that could ensue will vaporise conventional cost reduction efforts. For Dillon, if strategic sourcing doesn’t include sustainable sourcing, it is in danger of becoming worthless. And sustainable sourcing entails purging supply chains of slave labour.

Dillon explained that his aim is to bring ethical order out of the chaos global supply chains often contain. And that involves “measuring where you’re at” to embark on a sustainable supply chain journey. His company’s platform is dedicated to this vital measurement and the subsequent crafting of ethical supply chains that won’t destroy a company’s reputation because of hidden slavery and unscrupulous exploitation. Citing the example of a customer who staged conferences, Dillon explained that the company wanted ‘deep tier’ information about the conference tables they used. He continued: “They found out Asian workers were conscripted into Poland to make glue that was put into their conference tables. With this information, they can use their power, their money to be sustainable.”

It is not simple to determine risk in today’s multi-layered digital supply chains. But platforms such as FRDM, which provides an ongoing risk signal, can provide invaluable insights, and can empower companies to push their suppliers into adopting more sustainable behaviours. As Dillon puts it: “We are participating in a historic movement around changing the world with what we buy. Inside [your] money is power not only to change the world, but to change yourself.”

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