Typically, the supply chain compliance process involves background checks on suppliers primarily to examine efficacy, capacity, and legality.
In some countries, Germany as an example, certain companies are required to comply with human rights and environmental factors. This star ts touching on company values – the binding ‘what we stand for’ of a company.
This means that supply chain compliance needs to dive deeper into areas such as:
- Human rights of suppliers.
- Where the raw materials are sourced.
- Whether they’re environmentally friendly.
- What their controls are.
But one can take it a step further.
Most companies have a core value of at least one of ‘integrity; ‘trust’ or ‘honesty’. If a supplier steps out side of these values by overstating their revenue or doctoring tax returns, should supply chain managers take a view on this? Another common core company value is ‘diversity’. Should the supplier have a poor gender equality record, is that red flagged in the supply chain due diligence and compliance process?
In some organisations, company values appear as posters on the walls. Other companies take core values very seriously. How committed they are to those values will be tested by how supply chain management complies and aligns with those values.