Ethical sourcing refers to ensuring that the products and services that are sourced are developed in a safe and hygienic environment by workers who are paid fair wages and treated well to work during legal hours. It is a critical component of corporate social responsibility. The main goal here is to use a supplier that embeds principles of morality into the conditions of production, including proactively trying to minimize damage and/or exploitation of the environment and labor. When done correctly, ethical sourcing greatly minimizes the risk of failure within the supply chain.
Key points for ethical sourcing:
Here are some key points that organizations should follow when sourcing products and supplies ethically. They include:
A. It is important to visit providers often to see if they are doing what they say they are doing. Find out if your production is hygienic, safe and sustainable.
b. Check if the supplier will be able to deliver products with the same quantity and quality for several months down the road.
against If you cannot visit the provider in person, be sure to ask the key questions above. If possible, visit another company that sources from the same supplier to verify the quality of the products supplied by them.
d. Find the necessary information about the provider and also check their websites.
my. Word of Mouth – Check out what other similar manufacturers are doing and where they are coming from.
Benefits of ethical sourcing:
Early adopters of ethical sourcing gained a lot from this practice. With technological advancement, ethical sourcing is gaining ground today on a much larger scale. Such benefits include:
A. Market image:
The perception of a company in the mind of a consumer and their purchase of clothing is largely influenced by the way in which an organization conducts business. The last thing an organization wants is negative or adverse publicity. A small child labor or environmental issue can have a far-reaching impact on an organization’s public image as well as its market position.
b. ultimate impact:
Better relationships with suppliers, better cost structures, and reduced risk exposure are the most common benefits companies reap from ethical sourcing. The reason is that these companies put more effort into allocating time and resources to make sure that these supplies are up to or above moral standards, thus giving organizations the ability to reap all of these benefits.
vs Cost advantage:
When sourcing ethically, companies focus on product safety and improving process controls, allowing for better control of supplier scorecards and contract management. This gives companies the potential to minimize vendors, and most of all, product/service failure rates will be reduced, improving overall cycle time. This factor is very important during declining sales or recessionary times, as CFOs are under pressure to minimize costs and improve margins.
Ethical sourcing can definitely provide much-needed margin improvement during tough economic times. Ethical sourcing is not a novel approach, but it is a potential channel that organizations can implement to improve their public image and minimize waste.
