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Building a stronger brand through Ethical Supplier management Practices

Ethical Supplier management - Building a stronger brand through Ethical Supplier management Practices

Building a stronger brand through Ethical Supplier management Practices

In our last Infographic we discussed the impact of modern slavery in supply chains. Delayed payment culture to suppliers in lieu of buyers’ own incentives is not of any less concern.

It is appalling how big and established companies stifle their suppliers by delaying payments which may jeopardize their own branding in a market with stiff competition.

A 2015 research report stated ‘On average, invoices are now being paid 22.5 days beyond agreed terms, which represents an annual increase of 0.9 days’ and ‘Businesses with a turnover of less than £500,000 are experiencing the longest delay in payment, with the average invoice being paid more than 25 days beyond agreed terms.’ These practices expose organizations to a higher compliance risk and reputational risk further.


Could the prompt payment code help?

Prompt payment Code has set the standards for payment practices and layout best practices that covers prompt payment, as well as wider payment procedures.

  • Transparent Payments Terms and Conditions among all their supplier detailing to a level of sharing their standard Payments Procedure, agreeing Payments Terms and conditions.
  • Monitoring internal reports on weekly basis to highlight all payments that have been delayed.
  • One of the points, PPC highlights is having strong system to capture any complaint related to supplier payments.
  • Training and motivating your suppliers to apply good practices when they are dealing with their own suppliers.
  • Reporting compliance with various regulations in their annual statement. This will help build not just investors’ confidence, but also bolster a more positive brand sentiment.

Also, this year has seen more stringent reporting laws in the Small Business, Enterprise and Employment Bill which will legally require all large companies in the UK to report on their payment practices and policies.


With such laws being enforced, the following insights could help organizations to strategize at a broader level:

1. Devise a supplier strategy

An end-to end supplier strategy should include:

  • Devising a clear long term strategy in tandem with suppliers’ goals and regular communication with the supplier
  • Deploying Supplier Management tools to automate and standardize supplier processes
  • Including Suppliers in your vision and future roadmap

2. Supplier relationship goes a long way

The value of fostering mutual understanding and a collaborative environment with the supplier cannot be undermined and it does go a long way

3. Supply chain transparency

Making your supply chains more visible to your customers would help bolster a more positive brand sentiment and would also help keep unethical practices in check.

Technologies like RFID’s and labels would help transparency in supply chains by tracking both upstream; ensuring value to the end customers and downstream; ethical sourcing from the suppliers

4. Makes more business sense

Successful businesses are not only customer centric but also employee (read ‘suppliers’ in current context) focused. Ethical practices embedded in an integrated long term strategy have a direct impact on the perceived value by the customers and hence a direct relationship with the organizations’ marketing activities thereof.


At HICX Solutions we take care of the Supplier Strategy and the technology. Contact our Advisory Services to help you formulate your Supplier Management roadmap via

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