These days any talk of supply chins is no complete with some discussions on the sustainability of these supply chains. More frequently than not, we tend to talk of supply chain practices only by the main player, but do we insist the suppliers to these main manufacturers or service providers also follow the same practices ? We fail in checking these practices and that is the main failure of the upply chain.
The authors did a study on how the suppliers of 3 MNCs were following sustainability practices mandated by the same MNCs in the supply side of the supply chain. Unfortunately it was found that the sustainability practices mandated by the main cos. on their first tier and second tier suppliers were not being followed. An example was how major companies like Apple, Dell and HP had to incur the wrath of the public due to financial, environmental and social sustainability risks from their first level (nine suppliers) and second level suppliers (twenty two).
Even though first level suppliers do try their best to stick to sustainability concerns, the second and third level suppliers fail very much. It is attributed to the low levels of control and check exercised on the lower level suppliers (the riskiest elements) due to the very uncommon demands on cost optimisation and faster delivery enforced on these low level suppliers.
Effective strategies practiced by these high level; suppliers on their low level supplier fall into basically four classes,
direct
ensure min 7% of procurement spending by top level suppliers on low level suppliers
` ensure annual checks to ensure that lower level suppliers do stick to these standards
Mapping the connections and inter dependencies of these lower level suppliers to asses the possible risk of these lower level players
indirect
collective and
global
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