SUPPLY CHAIN SUSTAINABILITY: CHALLENGES IN ENSURING SUPPLIER'S COMPLIANCE TO SOCIAL AND ENVIRONMENTAL BEST PRACTICES

Abstract

There is a growing realization for the need to incorporate sustainability in global supply chains of multinational corporations. This realization stems from increasing pressure from media and NGOs that show the world the bad social and environmental practices in supply chains operations that deliver to big brands. Practices such as employing child labor, bribery activities and pollution from supplier operations ruin the reputation and revenue of the parent brand and hence companies have taken steps to ensure their suppliers comply with best practices. As almost all major brands and MNCs outsource their work to suppliers, supplier operations are not in direct control of the company. Therefore companies face various challenges to ensure that their suppliers along their global supply chains are compliant to best practices. The purpose of this research is to highlight these challenges faced by the company in order to ensure suppliers comply with best practices and implement sustainability in supply chain. The methodology adopted for this research is an unstructured interview with four professionals from various industries who have knowledge and experience of working with suppliers on sustainability. Their inputs have helped identify top challenges in dealing with suppliers. Methodology also includes a current state analysis of the supplier code of conduct, which is the primary document that conveys the policies of best practices to suppliers, to identify the gaps and policies currently implemented. This has resulted in the development of an over-arching sustainability framework that ensures suppliers are compliant to best practices throughout their engagement with the parent company. The framework also provides the ground work to overcome challenges and set sustainability goals for the suppliers. In conclusion, challenges are to be viewed in conjunction so as to effectively provide for solutions. The framework provided is a start to further identify industry specific challenges and research on their consequent solutions.