People and Communities in the Supply Chain

A business and its supply chain are inherently linked, each dependent on each other for the continuity of its operations.

But supply chains are under increasing scrutiny as businesses consider their sustainability goals; with eyes firmly on the impact of people and communities throughout the chain.

Whether it’s a local community impacted by deliveries and supply, or a workforce and wider economic reliance community, a business and the strength of its supply chain will now need to consider impact on these communities to succeed.

However, this dependency is mutual with both supply chains and communities offering benefits to each other including the opportunity to invest in sustainability initiatives to benefit the communities, while bolstering a business’ sustainability initiatives.

A sustainable supply chain is therefore key when considering the communities impacted and consequently how credibly a business is viewed by current and potential customers.

What does a business have to consider within a sustainable supply chain?

Remaining a prevalent part of a business’ supply chain, employee welfare (a business’ direct employees) is now more important than ever. So how can a business support their employees from a community driven perspective?

Here are a few examples of workplace initiatives:

• Payroll giving
• Sponsorship
• Mental health and wellbeing support
• Volunteering
• Charity projects
• Flexible working
• Community projects e.g. working to improve the surrounding community areas

But how do you know if you are providing enough, or any, support to the communities in your supply chain?

Effective engagement and consultation with suppliers and their communities throughout your supply chain is crucial in order to mitigate the risks to both a business’ supply chain and the potential disruption to said communities.

Often this can stem from the policies you have in place with your suppliers, and there are some questions you can ask yourself in order to begin assessing this.

Managing ethical practices is not limited to supply from geographical areas flagged for potential poor practices, but can mean ensuring all employees are managed fairly from working hours directives, fair pay, training and professional development from local to global sourcing.

It is important to recognise that businesses are able to implement supply chain sustainability strategies which are beneficial from both an environmental and social stance. The implementation of such strategies strengthen overall competitive advantage and consumer/client desire, whether this be B2C or B2B, tackling all 3 elements of the Triple Bottom Line (TBL).

Who is looking after People and Communities in the Supply Chain?

There are many excellent examples of businesses providing support to the communities throughout their supply chain including one which we are all well acquainted, that being Fairtrade.

Fairtrade is a system of certification aiming to ensure set standards are met throughout the entire production and supply process. Benefits for farmers and workers include workers rights, safer working conditions and fairer pay while the benefits for businesses include high quality and ethically produced products, resulting in happy shoppers, and with this customer satisfaction of course comes the likelihood of repeat purchase.

Not only is the Fairtrade system helping communities on an Individual level, it also enables farming groups to strengthen their business proposition, encouraging democratic leadership and improved governance making these groups desirable business partners.

With an increase in work comes an increase in income, strengthening the economy of the entire community and providing opportunities to more and more individuals and farming groups.

Fairtrade is an excellent example of an initiative to put communities first, and many businesses are now implementing similar Initiatives, understanding that a supply chain will not function to its maximum potential if all of the communities involved are not satisfied.

Positive community impact can be as small as engaging local communities to understand the impact of your facilities and how these can be improved, or supporting local projects from youth engagement to opportunities for those from disadvantaged backgrounds.

What can you ask of your suppliers to ensure they are complying with the new levels of scrutiny?

• Are their internal workers’ rights policies a requirement from your suppliers?
• Are they remaining compliant with laws and regulations around workers’ rights including modern slavery laws?
• Do they conduct annual satisfaction surveys?
• Do they consider staff welfare and wellbeing beyond statutory requirements?
• Are impact assessments completed when communities are impacted by change?
• Do they engage local communities to support in growth, development and enhancement?
• Do they consider your local economy and supporting SME’s when selecting suppliers?

To find out how Calathea can help you review and build a better supply chain, click here.