In this series, we have focused on digital operational excellence as a pre-requisite for good customer experience. As the data shows, CSR is an essential part of customer satisfaction

Over 80% of consumers expect consumer packaged goods companies (CPGs) to display strong commitment to CSR and are willing to invest more in products and brands that evidence ethical supply chain practices [1].

Consumers and stakeholders are increasingly concerned with the ethics of sourcing and production.

Responsible sourcing – adherence to the existing laws and standards on health and safety, labour conditions, environmental protection and business ethics in the process of sourcing and manufacturing [2] – is a key component of CSR. Today we look at how the latest mobile, cloud and analytics capabilities can enable collaboration between CPGs, their suppliers and auditors for continuous improvement in ethical trade standards. 

A Continuous View on Compliance

Ethical trade experts develop supplier codes, adopted by CPGs, which define the non-negotiable standards to be respected and adhered to by suppliers and their subcontractors [3]. With sourcing and production outsourced, experts and CPGs face a global supply chain challenge. How do experts clearly and consistently communicate supplier codes, procedures and reporting requirements to hundreds of suppliers with thousands of factories spanned across the globe? How do they make sure that suppliers in Bangalore and Dhaka alike show the same high levels of adherence, follow best practices and provide consistent feedback?

A process management solution like Zaptic, provides suppliers with all the regulations and best practices in a user-friendly format and enables them to routinely self-assess and provide a continuous view on compliance. A factory manager, for example, can be prompted to perform and record the checks and actions required to comply with the latest fire safety regulation. Are all fire exits clear? Have you checked the temperature on the shop floor? For every standard, Zaptic provides a notification and offers corrective actions for common issues.

Making compliance intuitive and easy incentivises suppliers to take and record action, enabling them to gain ‘earned recognition’ and use good ethical trade standards as a means to attract customers and workers. This helps to shift emphasis aways from one-off retrospective views on compliance to a continuous view which emphasises and rewards the corrective actions taken.

One Version of the Truth

A number of studies have shown how inconsistent audit results can be, depending on the training of auditors, their relation to factory managers, whether the audit has been announced or not. For example, auditors with longer work experience tend to find and report more violations as do female auditors and auditors who have not visited the factory previously [4]. Standardised audit methodology can improve the accuracy, efficiency and effectiveness of evaluations and the reliability of the collected data which can then be stored and accessed in the cloud, improving visibility. As the researchers from HBS Working Knowledge note, auditing should involve the transmission and adoption of knowledge through active communication between auditors, factory managers and employees [5] .

Configure Locally, Deploy Rapidly

In the early days of on premise software and cloud computing it would have made little economic sense to implement software solutions on the factory floor. However, the advancement of mobile, cloud and analytics capabilities has enabled the communication of supplier codes in a consistent way practically everywhere where there is smartphone penetration. What is more, a productivity and collaboration solution like Zaptic enables experts to easily update the ever-changing best practice procedures and to enrol new suppliers, eliminating the need for costly software alterations by specialised IT departments.

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