Friday 21st Oct 2016 - Logistics Manager

Manufacturers in the dark on suppliers ethics

More than half of UK manufacturers don’t audit their supply chains in terms of ethical issues like child of slave labour, according to new research from Achilles.

51 per cent of manufactures have no reporting mechanisms for issues such as slave labour, child labour and conflict minerals – elements sourced to fund terror.

The research also reveals that only 47 per cent were very confident their main suppliers’ suppliers Tier 2 were not using child labourers, and only 42 per cent were very confident in their Tier 2s not using conflict minerals.

Only 51 per cent of manufacturers are regularly auditing their direct Tier 1 suppliers in terms of ethics, or checking their claims that they do not use child workers, slaves or conflict minerals – elements sourced in areas that fund terrorism or war.

Only 38 per cent of manufacturers are auditing their indirect Tier 2 suppliers on the same criteria.

In addition, around one in five large manufacturers said they are confident in suppliers’ ethical compliance purely because of personal relationships.

96 per cent of manufacturers said they felt confident that they were effectively managing risks in their supply chain, however Less than half (47 per cent) of manufacturers had “mapped” their supply chains to identify the exact identity of all their suppliers.

Richard Collins, an executive director at Achilles, said: “This survey shows just how unsure large UK manufacturers actually are about the treatment of people within their supply chains.

CIPS Group CEO David Noble commented: “Procurement and supply chain professionals have a huge responsibility here. Trust and honest relationships are key in good supplier management, but trust alone is not enough.
“We can’t underestimate the complexity of today’s supply chains and neither should we ever underestimate the value that appropriately trained and skilled procurement and supply professionals bring. Ensuring as much visibility throughout the tiers of supply chains as possible is critical in reducing risk to reputation and finances.
We believe all procurement and supply management professionals should hold a professional licence and are calling on a self-regulated approach, to ensure trained staff conduct this important activity. Failing this may result in consequences that can be disastrous for business as well as those experiencing life in bonded labour.”