May 2023

Building an ethical supply chain

Creating an ethical supply chain that meets customer needs is a critical aspect of managing a successful business.

In today’s highly competitive market, competing on price alone isn’t enough - businesses need to offer their customers the highest quality products and services to remain relevant. An etika survey of 545 young people from across the UK and Australia found 75% of young people consider environmental or social impacts over factors like price or quality when comparing an item to purchase. However, building a sustainable network of suppliers and partners that is both ethical and transparent can seem overwhelming. In this blog post, we will walk you through some essential steps for developing an ethical supply chain.

Identify and Address Ethical Considerations
As a business owner or corporate leader, it's important to not only consider the bottom line but also ensure that ethical practices are incorporated into every aspect of your supply chain. Ethical considerations will vary between industries, locations, and business models. From labour practices to environmental impact, it's essential to identify the potential ethical concerns that may apply to your supply chain. Once you have established which ethical considerations you need to consider in your supply chain, you can then go on to implement strategies to create an ethical supply chain.

Implement Strategies for Transparency and Responsibility
Creating a transparent and responsible supply chain is essential for building trust with consumers and ensuring that business practices are sustainable in the long term. One way to achieve this is by implementing supply chain strategies that prioritise sustainability, ethical practices, and transparency at every step of the process. Retailers can work with suppliers and manufacturers to ensure that materials are sustainably sourced, and production processes are ethical and environmentally responsible. They can also regularly review and assess suppliers to ensure that they adhere to high standards of social and environmental responsibility.

Utilise Technology for Greater Transparency and Cost Savings
Technology can facilitate communication and information sharing between different stakeholders in the supply chain, increasing transparency. For example, blockchain technology can create a ledger that records every transaction along the supply chain, providing a tamper-proof and transparent system of record that can be accessed by all parties involved. Internet of Things (IoT) technology can collect real-time data from the supply chain, providing valuable insights into each aspect, from production to delivery. This data can help to identify issues, track inventory, and optimise decision-making based on real-time information. AI can be used to make sense of this data and provide insights to improve transparency. For example, Machine Learning (ML) algorithms can be used to identify correlations between data and predict trends in supply chain disruptions.

Regular Monitoring and Communication
It's not enough to simply assess supplier responsibility once and assume that it will remain in place over time. Regular monitoring is necessary to ensure that suppliers maintain responsible practices. This can be achieved by tracking KPIs, conducting audits, engaging in regular communication, and implementing corrective actions when necessary. Communication and collaboration are key to building a transparent supply chain, and openly sharing data and information with stakeholders can help build trust and promote accountability.

Building an ethical supply chain is not only a moral imperative but also a smart business decision. By identifying and addressing ethical considerations in the supply chain, businesses can mitigate risks, ensure compliance, and build trust with consumers. Implementing strategies that prioritise transparency, sustainability, and responsible practices at every step of the process is essential for long-term success. 

Utilising technology such as blockchain, IoT, and AI can further enhance transparency, reduce costs, and provide valuable insights to optimise decision-making. Ultimately, an ethical supply chain can help businesses attract and retain conscious consumers who demand responsible practices and respect for the environment, leading to a better world for all.

etika propriety research gathered the thoughts and opinions of 545 young people, aged 18-35, 274 based in Australia, 271 based in the UK, commissioned by etika and conducted on the Zoho Platform in May 2023.

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