Challenges of improving supplier performance
Managing and driving improvement in the performance, quality and on-time delivery of a large supplier base is a significant challenge. As it relates to social and environmental practices, improving supplier performance may be even more challenging, in part due to potential ambiguity over roles and responsibilities related to the corrective action process, and a lack of understanding over the value gained.
Typical responsible sourcing programs often include the following elements:
- Clear communication of requirements
- Supplier self-assessments
- (Selective) audits/ onsite assessments
- Buyers’ request for CAPA (Corrective and Preventive Action plan) implementation
- Capacity building
- Integration into purchasing practices
Effective implementation of improvements can only take place when they are owned, designed and embraced by suppliers. This level of ownership will only happen when suppliers understand the financial and operational benefits of implementing workplace improvements.
In my own experience, I have spoken with CEOs, CFOs and compliance officers in order to gain the necessary buy-in and budget commitment required to effectively implement environmental and social improvements. I make it a point to focus on their business, and to discuss the competitive advantages brought about by these types of positive changes. In my work at BSI, I work with my clients to support a shared understanding of stakeholder needs through root cause analysis and communication exercises with buyers, and roundtable conversations with suppliers to better understand their views and the obstacles they encounter related to implementing social and environmental improvements. Understanding the suppliers’ perspective helps transfer the ownership of the problem solving process. The greater the ownership that a supplier takes, the more likely the implementation will be successful.
Who takes ownership for your corrective actions?