Suppliers and vendors are taking greater ownership to manage and improve working conditions in the supply chain.
ELEVATE defines Supplier Ownership as the turning point when both the customer and supplier commit to more collaborative and proactive management of social responsibility in their supply chain. Unfortunately, many suppliers still fail to see the potential business value of investing in such a program and some customers fail to provide the business incentive or justification beyond ‘it is the right thing to do’. This is changing.
First, what’s changing in Supplier Ownership?
The typical reactive model is changing. Customers often bypassed their suppliers and vendors by going directly to the factories they sourced from and auditing them. Vendors tended to wait for the audits and then react to any non-compliance issues found. This is changing.
There was a key disconnect. Retailers didn’t trust vendors to effectively manage and commit to this process and vendors didn’t believe retailers understood the real costs of building a proactive program. Even when retailers invested, vendors expected retailers to continue to ask for lower prices, and / or reduce the orders and / or bypass them and go direct to the factory. Vendors did not believe customers respected their need for profit. This is changing.
Vendors saw customer audit programs and social compliance as less important than price, quality and on-time delivery and prioritized accordingly. Customers tended to reinforce this through lower weighting on their scorecard, few social compliance chargebacks, numerous supply chain penalties, and a willingness to turn a blind eye to non-transparency. This is changing.
Now, what is the way forward?
The ELEVATE model is proactive. This model begins when retailers define, implement, and manage programs that encourage suppliers to invest in being proactive, that respect the investments, and give those suppliers time to make the transition. Suppliers, typically vendors, commit to transparency, managing their own audit program using proactive communication with both their customers and factories, and invest in managing risk and improving factory performance.
ELEVATE works with brands to develop strategies to support and recognize supplier performance. We also work directly with suppliers to build out effective responsible sourcing programs to help improve their relationship with customers, which will successfully differentiate them from their peers.
Supplier Ownership services
ELEVATE can support both retailer and supplier development and strengthen the supplier ownership value chain. ELEVATE can help retailers / customers develop the program, guidelines, policies and graduation path for a supplier ownership program, and work with vendors to develop all of the links in the value chain.