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Are supply chain audits fit for purpose?

EuropeSupplier relationship managementConsumer goodsContract managementCorporate social responsibilityEthicsRetailCSR PoliciesSupplier Audits+-
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A recent investigation by the BBC found Syrian refugees were working in factories making clothes for some of the world’s biggest retailers, raising questions as to whether supplier audits are fit for purpose.

 

The investigation, carried out by the Panorama programme, found that underage Syrian refugees were working in Turkish factories producing clothes for retailers including Marks & Spencer (M&S), Mango, Next and Asos. The investigators said they found children as young as 15 working in the factories, some for more than 12 hours a day.

 

It is a story heard many times before. Retailers claim they simply aren’t aware of such things happening further down their supply chains. Contracted firms contract out work, which they have no control over and point out they have carried out their due diligence through supplier audits.

 

In light of this latest scandal, the pressure will be on procurement to carry out more frequent, more stringent audits. Some analysts, however, suggest that audits are only part of the answer.

 

“Audits are only really a snapshot in time," says Kosten Metreweli, chief marketing officer at Segura Systems, in an interview with Procurement Leaders.

 

"If you audit something on an annual basis what happens in between is not accounted for and is subject to change the moment the auditor walks out of the door."

 

Metreweli suggests companies start moving towards continuous tracking, so that they have an understanding of where everything is coming from at each stage of the production process.

 

The implementation of the latest technology is crucial, as is getting the right resources in place dedicated to tracking, analysing and reporting what is happening. Both of these require significant investment on the part of the business.

 

Such scandals will always emerge and procurement has to do all it can to mitigate the risk both for the business in terms of its reputation and for the vulnerable people who can be caught up in such work.

 

Audits as they are are not the answer, but technology can clearly help to make them more effective. The difficulty is in convincing the business to invest.

This article is a piece of independent writing by a member of Procurement Leaders’ content team.

Sophie Dyer
Posted by Sophie Dyer