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Sustainability Will Never Improve Unless We Empower Suppliers

Quality Digest

By Costas Xyloyiannis, CEO of HICX

Suppliers who are treated well provide better data

During the early 2000s, I was a recent software engineering graduate. Along with a friend and fellow graduate, I landed some project work with a major pharmaceutical company. The CEO, who had just signed up to the U.N. Global Compact, needed to know how sustainable the company’s supply chain was. He tasked the chief procurement officer (CPO) to audit the company’s suppliers—some 150,000 of them.

Back then already, supplier data were a struggle. The CPO needed to know who all these suppliers were and whether they complied with a list of principles to which the company had committed. It was our job to develop the platform from which this could be determined. Long story short, the CPO was able to gain the visibility that he required. This meant he could demonstrate compliance at the board level, making the project a success.

It was exciting for us to witness the role that data played in making supply chains more visible. In the 20 years that have followed, we’ve had the opportunity to explore this topic with some of the world’s biggest brands. If there’s one thing I’ve learned from this experience, it’s that good supplier data are a function of good supplier engagement. And importantly, the reverse is also true.

Experience in equals data out

Today, environmental and social governance (ESG) questions have become mainstays on the corporate agenda. As we learned when starting out, success in these areas requires visibility into supplier data. Traditionally, it has mostly been the CPOs who have faced the challenge of collecting and maintaining supplier data. In the current climate, there’s an opportunity for the broader business to support this area. What it takes is for leaders to fundamentally rethink the experience they offer to suppliers.

Receiving supplier data for ESG is straightforward, in theory. Suppliers own it. Manufacturers need it. The resolution would be simple, but for the technology that governs how the parties work together.

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