Encouraged by customers, shareholders and regulators, companies are striving to support sustainable procurement by conducting their activities to minimize negative impacts on the communities in which they operate, and on the environment. As those organizations outsource an increasing fraction of their value chains to external suppliers and service providers, ensuring that the same standards are upheld across those networks has become increasingly important.
Managing sustainable procurement risks can be extremely challenging. Procurement departments need to achieve total supply chain visibility and get early information on possible compliance risks or supplier distress. In today’s global multi-tiered supply chains, it’s crucial to eliminate any long-standing blind-spots in supplier identification, assessment and monitoring. Moreover, the size and complexity of those supply chains make it difficult for organizations to target their audit, risk management and supplier development resources effectively.
The consequences of failures in compliance are significant and long-lasting. Companies may face prosecution if externally-sourced products, materials or components don’t meet regulatory requirements. Unfair labor practices, lax safety standards or environmental damages can create reputational harm that may take years to repair. In the worst cases, irresponsible behavior by suppliers can result in injury or loss of life.
Tackling these sustainable procurement challenges can be done with a supply chain risk management approach which leverages millions of data points to gain full supply chain transparency. DHL Resilience360 can support sustainable procurement practices with a comprehensive suite of tools that facilitate a more efficient and more effective approach.