L5M5: Managing Ethical Procurement and Supply ebook Pdf notes CIPS

Learning outcomes

1.0 Understand the impact of ethics and sustainability in supply chains

1.1 Analyse the implications of ethics and sustainability in supply chains

Definitions of aspects of sustainability such as corporate social responsibility, responsible procurement and environmental purchasing
The reasons for the focus on sustainability
The risks and rewards of sustainability
The development of sustainable procurement policies
The implications of ethics for the supply chain
Equality, modern slavery, bribery, corruption, fraud, human rights
Breaches of codes, reputational and brand damage

1.2 Contrast the drivers of globalisation in supply chains

Use of STEEPLED analysis to explain the drivers of globalisation
Competitive advantage through global sourcing
Globalisation and low cost country sourcing

1.3 Differentiate between the cultural and social issues in supply chains

Language and cultural barriers
Labour standards and forced working practices
Wages and social security payments
Inequalities of workers
Health and safety standards

1.4 Contrast the potential conflicts that may arise between the needs of stakeholders in supply chains

The profit motive and the search for low cost sourcing
Demand management and the need for urgent orders
Short term commercial gains versus long term availability of supplies

2.0 Understand the importance of compliance with standards to achieve ethical and sustainable supply chains

2.1 Contrast levels of complexity in supply chains and how they impact on compliance with standards for ethics and sustainability

Mapping supply chains
The use of sub-contractors by suppliers
Portfolio analysis that measures sustainability risk and the importance to the organisation
Portfolio analysis that measures sustainability risk and scope for improvement

2.2 Evaluate how contractual terms can support compliance with standards for sustainability in supply chains

Monitoring performance
Feedback from suppliers that help achieve compliance to standards for sustainability
Subjecting sourcing strategies to independent review
Accountability for achieving social, ethical and environmental standards

2.3 Evaluate the use of third party organisations to promote compliance with standards for sustainability in supply chains

Sourcing third parties for auditing services
Assessing the competences of third party organisations for the provision of audit services
The difficulties with duplications of codes and audits

2.4 Critically assess how relationships with suppliers should deal with infringements of standards for sustainability

Raising awareness of standards
Involving workers in workplace matters
Creating corrective action plans and supplier development programmes
Escalating problems and exit arrangements

3.0 Understand initiatives and standards to improve ethical and sustainable practices in procurement and supply

3.1 Assess how the use of labour codes can help achieve ethical and sustainable supply chains

Standards set by the United Nations (UN) and the International Labour Organisation (ILO)
The role of the UN and ILO in pursuing improved sustainability
Labour codes of conduct such as the Ethical Trading Initiative (ETI) and the Agricultural Ethical Trading Initiative (AETI), Social Accountability International’s standard SA8000
Social Accountability International (SAI) and the standard SA8000

3.2 Analyse how the standards on environmental purchasing can help to achieve ethical and sustainable supply chains

The role of the International Organisation for Standardisation (ISO) and the environmental standard ISO 14001
The European Union’s Eco-Management and Audit Scheme (EMAS)
Other standards for environmental purchasing produced by standards organisations
Industry standards and standards set by organisations

3.3 Analyse how standards can achieve improved fairtrade

The World Fair Trade Organisation (WFTO) and its principles and charter of fair trade
Fairtrade Labelling Organisations International (FLO) and global fair-trade organisations
Fair trade standards that effect the workplace and producers

3.4 Examine approaches to achieve responsible procurement and help promote ethical and sustainable management
Approaches such as:

The implications of responsible procurement
The responsible use of power in supply chains
Managing conflicting priorities
Reducing operational financial and reputational risks