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Role of Ethics in Supply Chain Management


Date Posted: 10/22/2017 5:42:09 AM

Posted By: chammy  Membership Level: Silver  Total Points: 379

Role of Ethics in Supply Chain Management

Ethics- A code of moral standards of conducts for what is “good” and “right” as opposed to what is “bad” or “wrong”.
Ethical behavior – That which is right in the context of governing moral code.
i. Legislation
Most developed countries have laws governing ethical business practices but unscrupulous companies can still profit from the tax practices of developing nations.
A recent passed in California seeks to change this, however ,by insisting that any company doing business in the united state demonstrate that its supply chain does not use slave labour or illegal immigrant workers at any point. This law insists that companies share responsibility for the practices of their suppliers, thereby raising standards and making the entire factory –to- store processes more ethical.
ii. Environmental concerns
Key to the responsible supply chain policy is greater collaboration between suppliers to improve working conditions reduces carbon emissions and generally rise the profile of oxygen as a sustainable business, tapping into the wider benefits such an image brings.
Suppliers who refuse to the new policy risk losing their supply contracts all together.
Clearly there are other reasons for implementing an ethical supply chain, many of which produce discernible benefits for a company’s balance book.
iii. Brand image
Computing giant apple has recently hit the headlines owing to concerns regarding the treatment of staff working in the factories belonging to their suppliers based in Far East.
Rumors of poor pay, long working hours, unhealthy working conditions, and series of workers suicides have promoted Apple CEO Tim Cook to announce a number of inspections to be carried out by an independent body in an effort to bury claims of unethical trading practices.
iv. Extend to suppliers
If one of your suppliers has a problem whether it’s a problem of ethics or a problem of quality consumers will hold you responsible for choosing that

Despite the knowledge that consumers assign by association, their codes did not extend to suppliers.
It is important that your supply solutions look beyond what happens with your four walls and encompass your suppliers
v. Transparency and accountability
All the parties involved in the supply chain process have to be open and accountable.
Public resources are used by different parties in supply chain which must adhere to fair usage policies.
vi. Collaboration
The suppliers you choose may or may not have systems in place to embrace ethics and sustainability.
Instead of writing these suppliers off or holding their breath and hoping for the best many enterprises are collaborating with suppliers ,providing them with the tools and guidance they need to bring their practices in line with the purchasing company goals.
vii. Compliance and continuous improvement
Compliance of local laws is a mandatory pre-requisite to local laws.
No party shall bypass the laws of the state nation for their business motives to gain unfair advantage.
All entities shall work towards fostering a continuous improvement culture in their supply chain activities and serve as a role model for others to follow.
viii. Personal integrity
Integrity is a trait in a person who exhibits qualities such as honesty and having principles that are morally strong.
Personal integrity is a strong sense of commitment towards morality, openness, and high standards of ethics that an individual stands by and act as a role model for his/her colleagues.
This in turn ensures the entire supply chain process is ethically right.
ix. Professionalism
All participants of the supply chain should exhibit a high standard of professionalism
It means each entity should treat the other with equal amount of respect and trust, in no way shall intervene, or command the other.
Information that is deemed to be classified should be guarded safely by all parties involved adherence to the laid down terms and condition should be a pre-requisite for all.

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