Integrating Corporate Social Responsibility into Your Supply Chain
Let’s start by busting a myth about Corporate Social Responsibility (CSR): it’s a feel-good movement recently started by millennials.
CSR gained momentum in the late 1950s with the expansion of large corporations and became a popular subject in the 1980s, covered extensively by Peter F. Drucker and others. In the wake of the financial crisis of 2008–2010, CSR again became a focus for evaluating corporate behavior. Published in 1953, Howard Bowen’s Social Responsibilities of the Businessman was the first comprehensive discussion of business ethics and social responsibility. Many experts believe it to be the seminal book on CSR. Though written more than half a century ago, it’s still cited for its relevance to current questions of business ethics.
Sometimes referred to as the triple bottom line (for people, planet and profit), CSR continues to gain momentum. Evidence for this can be found in the increasing number of companies choosing to report on CSR initiatives and the thriving cottage industry that provides a variety of CSR-related certifications.
According to a Grant Thornton UK study, the primary reasons companies adopt and fund CSR programs are revenue growth, lower costs, human capital recruitment/retention and the somewhat nebulous “right thing to do.”
We can all combine and parse the reasons given in a variety of ways, but it’s obvious that a growing number of corporations believe responsible business practices enable them to generate long-term value for stakeholders and shareholders.
Cost management is typically the driving factor for businesses, with customer demand and the “Right thing to do” close behind. This shows that, although cost and efficiency businesses have a strong conscience.
Global Trends in Corporate Social Responsibility
CSR in Your Supply Chain
CSR opportunities can be found across the entire supply chain in many different forms, including vendor compliance, quality management and sustainability as a whole. A company that works to maintain CSR standards can do so by implementing best practices in each of these areas.
Prioritization of compliant suppliers allows companies to utilize supply chain capabilities to increase sustainability.
Servicing aftermarket parts can also improve sustainability, but if not done strategically can be costly and ineffective. With precise, continuous planning for broad product portfolios and long tail items, companies can shrink risk, cost and environmental impact. From the raw materials to the delivery and potential returns of the product, sustainability can be achieved at nearly any phase.
Quality management is another CSR factor that can be strongly influenced through supply chain initiatives. With tight quality specifications and endless varieties and options for many, businesses require a watchful eye on their quality management efforts. With a Digital Supply Chain Platform that is complete with quality management capabilities, companies can determine what areas need improvement, inspect and audit facilities, identify quality concerns quickly and more to deliver the highest quality product to market. With every participant in your global supply chain — retailers, brands, vendors, manufacturers, suppliers, contractors, agents, brokers, carriers and freight forwarders – on the same page, quality management is better executed.
- Do it right or don’t do it. Hollow, half-hearted efforts will be detected quickly.
- Worse, doing it wrong has real consequences. In a world where everyone is a photo-journalist, the stakes of transgression are higher.
- Part of doing it right is putting good people in positions of real power.
- Implement CSR for sound business reasons. Don’t be satisfied with “because it’s the right thing to do.” Do the hard work of understanding what that means in terms of stakeholder value.
- Measure it, report it, be transparent.
- Be bold. Look for first-mover advantage.
There are many resources available, including the SASB materiality map. Regardless of where and how you begin, keep in mind that Logility’s platform helps provide increased visibility and compliance capabilities to improve your social responsibility. By focusing on the details of creation and implementation through supply chain management and planning, businesses are more readily able to achieve their CSR plans.