What you don’t know about your suppliers, your supplier’s practices and your overall supply chain is bound to catch up with you – even if you chose to ignore it.
A recent study, conducted by 6 public health, consumer and environmental groups including the NRDC and Consumers Union, illustrates why such diligence matters.
Many fast food and fast casual restaurant chains have made pledges in recent years to end antibiotic use in meat and chicken. Yet according to the study, most of the meat used by these chains comes from animals that are “routinely fed antibiotics.”
The study specifically looked at 25 of the largest fast food and “fast casual” restaurants in the US and graded them on how well they stuck to their commitments regarding antibiotics and transparency in their supply chains. The study revealed only 5 of these companies passed the test (meaning they received a grade of “C” or above): Chipotle, Panera, Chick-fil-A, McDonald’s and Dunkin Donuts. Panera and Chipotle received the only 2 “A” grades.
Twenty restaurants received a score of “F” in the report. These include: Applebee’s, Arby’s, Burger King, Chili’s, Dairy Queen, Denny’s, Domino’s, IHOP, Jack in the Box, KFC, Little Caesars, Olive Garden, Outback Steakhouse Grill and Bar, Papa John’s Pizza, Pizza Hut, Sonic, Starbucks, Subway, Taco Bell and Wendy’s.
While the study appears more based on monitoring stated policies than actual compliance and testing of individual items from specific stores – which will likely become more frequent as consumers crave not just hamburger “cases” but greater transparency – the headlines in major publications covering the study should be a wake-up call for organizations to get on top of their information supply chain by investing in the same levels of traceability and control as industries such as pharma and aerospace and defense.
Of course, policy must come first – but stated intentions are just the ante. Ultimately, what you don’t track and measure from an ingredient, material and labor perspective happening in your supply chain will become an increasing liability and PR nightmare waiting to happen.
But where should procurement begin? Here are some quick tips:
- Benchmark your corporate social responsibility (CSR) procurement and supply chain policies within your industry. Make sure you do not stand out (negatively).
- Tell suppliers, customers and the market what they can expect from your corporate social responsibility related initiatives and when.
- Don’t just develop supplier code of conduct documents – make them living, breathing artifacts that suppliers both live up to and are measured against on a continuous basis.
- Insert contract clauses into new agreements that allow monitoring and enforcement while creating incentives and penalties for non-compliance regarding CSR areas. Consider having suppliers pay for monitoring and enforcement if necessary as part of requirements if you are a large enough buyer.
- Explore how supplier management, supplier information management and supply chain risk management technology can help monitor and enforce policies – and create audit trails of activities.
- Integrate compliance information directly into sourcing and procurement systems and processes, and create a closed information loop.
(Cross-posted @ Spend Matters)