Sometimes I get asked how supply chain can have anything to do with Corporate Governance as all they do is buy things and move them around. This is one of the biggest areas for corruption and inappropriate behaviour within your business. The supply chain team have a very challenging role to find the best materials, at the best price, with the best payment terms, while moving them around at the cheapest possible rate and getting them to where we need them when we need them there. LinkedIn Article
Procurement has been known for decades as being one role in the organisation where suppliers will put immense pressure on you to buy their products over someone else’s products including offering lucrative personal benefits.
Which this in mind the need for supply chain to implement strong airtight corporate governance and anticorruption systems cannot be stressed enough as it can break your organisation with inferior raw materials/products, poor logistic services and reputational issues just to mention a few.
The supply chain team need to implement a number of activities and controls which will strengthen the organisations corporate governance system which include;
- Supplier/vendor development programs which are detailed systems, policies and procedures for the identification of potential suppliers/vendors, validation of the good/services they offer, validation of the processes they use, validation of the compliance to local/organisation requirements and developing a win-win relationship.
- Implementation of procurement policies including the appointment of a procurement committee structures where there is clarity on the decision process to award suppliers contracts.
- Detailed anti-corruption process including gift policies, entertainment policies, decision making policies, related parties policies and disclosure policies for all employees with specific attention paid to the supply chain team.
- Fairtrade policies how goods and services will be purchased to ensure growth of the industry including child labour, harassment, copyright and employee relations.
- Clear and detailed contractual requirements for all activities or purchases to ensure all parties are aware of all requirements and performance measures.
- Measurement and implementation of carbon footprint strategies to assist the organisation to support the reduction of greenhouse gasses.
- Ensuring decisions and reasoning for decisions are evaluated on a regular basis to ensure long term relationships with suppliers remain professional.
- Design and implementation of business continuity methodologies/strategies within the value chain to ensure minimal interruption to the business operations as a result of interruptions in suppliers/vendors operations.
The above list looks like a very short list of responsibilities for a major function within the business but the requirements to implement these responsibilities are not small, they will take many years of concerted effort to ensure the requirements are implemented and continually improved. Learn More