by SARAH NG, corporate communications manager, ICTI Ethical Toy Program
Over the past two years, supply chain disruptions have affected every business in some way or another. The benefits of strong leadership in supply chain sustainability can help companies thrive, even during challenging times. While we were all facing the same threat, some businesses have had the ability and agility to turn these challenges into opportunities, and some have become leaders in sustainability by making great progress in advancing their corporate goals. These companies were constricted by reduced budgets, but focused their investment on greater impact and efficiency, improving the entire business ecosystem. Here’s how they did it.
INVEST IN HIGH-IMPACT AREAS
The 2020 Gartner Fortune of Supply Chain Survey highlights that 93% of respondents view investing in responsible sourcing as a priority. While businesses are emphasizing their commitments in the “S” sector of their environmental, social, and governance (ESG) journey, they should leverage investment decisions in responsible sourcing to minimize potential risks and maximize relevant business benefits.
Supply chain management is important to business profitability, especially supplier compliance management. This can affect a business’ reputation and result in the potential ban or recall of products, creating difficulty in securing future listing of products with retailers. Therefore, forward-thinking businesses must go beyond box-ticking compliance exercises to become trusted partners that encourage suppliers to take ownership of their social and environmental performance.
To achieve this, businesses will first need to understand their supply chain performance, including their direct manufacturers, vendors, licensees, and agents. This seems like a tough task, but many leading companies have adopted the ICTI Ethical Toy Program (IETP)’s all-in-one responsible sourcing technology, Connect Platform, to increase their supply chain transparency, benchmark their suppliers, and stay informed of any possible disruptions in real-time. To allow data collection at scale, our remote Social Impact Assessment and Environmental Questionnaire make global data collection an effective and low-cost effort. Utilizing available resources to increase agility and efficiency can deliver great value to operations.
RISK ASSURANCE: ANALYSIS, REVIEW, AND MANAGE
Once businesses have gathered the metrics, they can improve decision-making by taking a data-driven approach to identify high-risk areas. Many businesses believe an audit report is all they need, but what actually sets businesses apart are leaders who encourage non-compliance issues from reoccurring, eliminating risks and effort duplication.
“We believed our overtime working hours noncompliance was caused by a labor shortage,” says one supplier who struggled to meet the working hours requirements of the IETP social audit. With support, this manufacturer was able to accurately identify the root cause of the issue and implement new policies that resulted in addressing the challenge and remedying the non-compliance in the long term.
Industry leaders expect an investigation of root causes. “After the Remediation Program concluded, we realized the root cause of not meeting the requirements for IETP certification was not due to the number of workers we employ, but due to insufficient production planning,” the supplier says. An impressive 100% of suppliers who completed the Remediation Program effectively rectified all non-compliances and achieved IETP certification once again after serious issues were found. This means suppliers meet buyers’ requirements and products get on the shelf without delay.
Travel to supplier partners is not possible for most companies. IETP is working with factories on the ground every day: We are the eyes and ears for our members. If you or your supplier do not have the local expertise or resources to identify these problems and provide practical best practices to tackle them, partnering with a leading responsible sourcing initiative will increase efficiency and supply chain confidence.
CREATE LASTING IMPACTS
Some industry leaders link their responsible sourcing efforts to global collaborative objectives like the UN’s Sustainable Development Goals. These companies are integrating best-for-worker programs into their corporate commitments to create positive social impact throughout their global supply chains. The collaboration between suppliers, other toy businesses, and IETP to introduce family-friendly spaces to factory workers and their kids is a great example of achieving positive impact.
IETP provides multiple tools to support companies in delivering their ESG objectives. If you are looking for a trusted partner to work with, get in touch at join@ethicaltoyprogram.org.
This article was originally published in the June 2022 edition of the Toy Book. Click here to read the full issue!
