Ian Taylor: responsibility in the supply chain

September 01, 2005

Supply chains and CSR share many of the same aims, argues the president of the Chartered Institute of Purchasing and Supply.

Why is CSR important in supply chains?

CSR for me is about risk management, efficient use of resources, building a sustainable and diverse community (including suppliers), and high ethical standards. All these issues are central to supply-chain management. CSR is also important in raising the profile of supply chain management by doing the right things and getting recognition for the contribution that the supply chain can make to the wider community and environment.

What role does the CIPS have in the CSR policy debate?

CIPS is very active in offering guidance on best practice to the procurement profession and we contribute to a number of bodies developing policy and initiatives in the area. Our role is to make sure that those promoting CSR understand supply chain perspectives and those in supply chain roles grasp what is needed from them.

Is there a business case for responsible supply chain management?

Yes, people often argue that CSR costs money as an excuse for not doing anything. It may be difficult to do everything that needs to be done but buyers tend to be very imaginative problem solvers and are able to find commercial solutions for using sustainable materials, investing to become more efficient (and less polluting) and promoting better practice amongst suppliers.

Are UK supply chain managers doing enough to implement responsible supply chain management?

No! A lot is going on. Our CIPS supply management awards each year have an award for CSR practice and we get tremendous entries with organisations developing really innovative solutions. My own President’s challenge to the profession to do practical personal things to promote better CSR has been very well received. But in many organisations CSR is still a peripheral issue with policies still being developed and agreed rather than implemented.

Is it realistic to hold companies responsible for their suppliers’ actions?

Bad publicity has a nasty habit of finding problems in supply chains particularly if the buying company is public about its commitment to CSR. That means you have to take responsibility for the behaviours and standards of your suppliers. As buyers you have tremendous power to influence your suppliers and it would be wrong – from the point of view of morality, risk management, and efficient procurement – to ignore bad labour or environmental practice.

What will be the emerging trends on the CSR agenda in the next 5-10 years?

Ethical standards will continue to be a growing theme. Western organisations will find it increasingly difficult to apply any less than perfect standards and there is a crying need in the developing world to ensure that buyers and sellers’ behaviour is honest and transparent as a fundamental element of economic growth. If global warming does really start to bite in the public imagination then buyers will have to up their game on reducing emissions and quickly. In particular the unsustainability of business travel by jet and car will become a big issue when most business can be done on-line. I’d also expect the emergence of China and India as global powerhouses to be a major influence on CSR – either because they will add to the problem on a big scale or more likely they will become a huge new force for improvement to go one better over the polluting Western economies!

Corporate Citizenship Briefing, issue no: 83 – September, 2005

Ian Taylor is President of the Chartered Institute of Purchasing and Supply, representing 36,000 procurement professionals world-wide. He is director of the Centre for Procurement Performance at DFES responsible for procurement across the English education system. He was previously head of procurement at banking group HBOS. He has made CSR the big theme of his presidency in 2005 and has challenged CIPS members to pledge themselves to take practical personal steps to improve CSR in their organisations, in their supply chains and in their communities using their professional procurement skills.