Dive Brief:

• Dell and Intel recently hosted an executive workshop where supply chain conditions were discussed, examining how to best expand practices leading to a sustainable supply chain, Sustainable Brands reported.
• Worker turnover and varying sustainability standards were deemed to be the most challenging issues delaying greater progress. Tier 2 and Tier 3 suppliers experiencing continual staff turnover struggle to meet transparency and varying standards between multiple brands.
• The two companies concluded supplier audits should focus on insight, rather than execution. Various auditing associations make the auditing process burdensome for partners, leaving little room for suppliers to independently seek improvement. Yet, without supplier buy-in, sustainability efforts are ineffective.

Dive Insight:

Labor abuse, conflict minerals and environmental standards all form part of the ethical supply chain paradigm, with the burden of action passed along the chain — from consumers to governments and brands — to ensure higher standards.

Yet, just as large companies complain of the onus of excessive and international government regulation, downstream suppliers face a similar burden from the various brands they serve. Imagine submitting a weekly report or forecast not just to your boss, but to each of your boss's reporting colleagues who, by virtue of serving different departments, expect different statistics, information and may even request an individual meeting. Before long, the process would become a rote, hated task to complete with little incentive to go above and beyond.

Such is the problem faced by suppliers looking to comply with ethical supply chain standards. In many cases, no single system for establishing compliance as various stakeholders monitor different indicators. The industry often speaks of collaborating with suppliers to ensure full chain quality and visibility, without recognizing the burden it can place.

Dell and Intel's call for industry collaboration on a single auditing system seeks to address this reporting issue. Some industries, like the apparel industry, have preferred auditors that help establish unified standards. Yet, an additional problem arises with unified standards: in efforts to reach a common process, the independent nature of auditors could be compromised.

Companies looking to embrace ethical sourcing standards must recognize the dual issue that exist, but also consider their supplier relations. At this time, it remains unclear which, if any, method is most effective. Initiatives that secure collaboration, and not just reporting, can go a long way in improving standards worldwide.