Ethics
Greenwashing can have a detrimental impact on brand reputation , from undermining brand image and losing consumer trust , to being sued . Many large organizations like Volkswagen , Coca-Cola and , most recently , Swedish fast fashion giant H & M have all faced class action lawsuits over greenwashing .
Complying with legislation
Supply chain ethics isn ’ t just a concern for consumers . Transparency in supply chains is becoming increasingly important for businesses at a legislative level .
Last year , the Uyghur Forced Labor Prevention Act ( UFLPA ) was enacted , prohibiting any goods suspected of containing forced labor from entering the US . Specifically , it prohibits any goods produced , mined , or manufactured wholly or in part in the Xinjiang Uyghur Autonomous Region of the People ’ s Republic of China , or produced by certain entities linked to Xinjiang ’ s forced labor programs .
Chinese fast fashion brand SHEIN was recently questioned by US senators on potential links to forced labor within its supply chain . Though the company denies this , the UFLPA highlights the need for businesses to know their supply chains and to provide evidence that their products are of ethical origin .
Boosting local economies
Putting social responsibility at the heart of supply chain procurement has a wider benefit for local communities .
Both businesses and individuals alike feel the financial impact of a recession , from widespread job losses to increased inflation . But by incorporating ESG ( environmental , social , and corporate governance ) policies into supply chains , businesses can enhance economic and social conditions for local suppliers , thereby reducing the impact of financial crises and strengthening supply chain resilience .
Mitigating risks
As companies increasingly struggle to control their supply chain costs , it ’ s never been more important to evaluate the efficiency of supply chains and risk management strategies .
However , according to a recent study , almost a third of procurement teams are cutting corners with their sourcing criteria to ensure supply . This is resulting in more high-risk behaviors being carried out , leading to increased supply chain vulnerability . Quality control is one of the top struggles in supply chain management . Getting it wrong could harm brand reputation as well as result in losses from product defects . Introducing an effective quality control management program will strengthen supply chains , improve resilience and lower operating costs .
Additionally , businesses should capitalize on new technologies , such as blockchain and cloud computing , and how they can ensure the smooth operation of complex supply chains while driving down costs . Digitizing supply chains helps improve business ethics by opening channels of communication , improving efficiency , and allowing business leaders to harness data information for long-term growth . ■
For a list of the sources used in this article , please contact the editor .
Alex Vavilov www . stenn . com
Alex Vavilov is Chief Innovation Officer for Stenn International . Stenn is the largest and fastestgrowing online platform for financing small and mediumsize businesses engaged in international trade . Based in London , Stenn provides invoice financing and factoring services in over 70 countries and is backed by financial giants like HSBC , Barclays , Natixis and many others .
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