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Identifying Risk in the Supply Chain and Improving Audit Scores
Supply chain responsibility issues are chronic, widespread, and seen in most every industry. As multi-national companies will attest, governments around the world are beginning to write legislation to ensure social and environmental responsibility in business is the accepted standard of the future. Supply chain audits are one of many tools companies use to achieve the quality and accountability they want from their suppliers. Audits, however, while necessary, are complex events requiring significant time and effort. Are there simple indicators that can provide a quick indicator as to which companies may be the most socially and environmentally responsible and which companies may be the least? Dell has found that, of the many factors that companies investigate to determine supply chain social and environmental risk, the publication of a publically available Corporate Responsibility report was the single factor with a significant correlation to audit score. Indeed, this suggests that the types of processes and activities required to produce a CR report may make this a simple step to improving social and environmental performance in the supply chain.