The RBA’s Annual Conference Highlighted the Three C’s When Thinking About the Supply Chain of the Future

By Sanchita Banerjee Saxena

Last week, I attended the Responsible Business Alliance’s (RBA) annual conference in Santa Clara, CA. The theme this year was “The Supply Chain of the Future.” A number of panels with representatives primarily from the private sector, but from government and civil society as well, addressed critical issues related to the entire global supply chain, such as human rights, the environment, minerals sourcing, emerging regulations, supply chain resiliency, and more.

Based on a survey of RBA members, supply chain resilience was named a ‘top issue’ for 2023. Clearly this is top of mind as companies try to navigate both the opaque nature of their own global supply chains and the complexity of new regulatory requirements. While both resilience and regulatory alignment might be challenging to understand and implement, as a member of the Office of Trade for U.S. Customs and Border Protection stated in their opening remarks, “…it is far more costly if you DON’T [move forward in these areas]!”

The discussions brought forward a vision for a supply chain of the future that aligns with Article One’s next generation supply chain strategy, based on what we call the three C’s: Communication, Collaboration, and Commitment.

• Communication. The importance of meaningful dialogue—among businesses, between companies and their suppliers, and, most importantly, with workers and other rights holders—was highlighted again and again. A leader of global supply chain operations at a multinational technology company described how the manufacturing of their semi conductors can cross up to 70 borders and, “…if anything is compromised, it can affect the entire value chain.” Without communication across all the various tiers of the supply chain, it is impossible to manage this complexity, they stated.

A chief scientist at a metals and mining company, spoke about the importance of not repeating mistakes from the past and doing things differently. Key to this, they stated, is by communicating with the local communities impacted or potentially impacted by their projects and working together to co-design solutions.

On a panel on remediation, a leader of supply chain sustainability at a global hardware and software company, highlighted the importance of communication with workers to understand, “…what makes a worker feel heard, what makes them feel whole?” A representative from an independent organization providing expertise on global supply chain labor compliance emphasized the importance of communication when designing an effective grievance mechanism. They described scenarios where workers felt more comfortable discussing their grievances with a peer as opposed to their manager or with a NGO representative rather than through an anonymous mobile app. In our work at Article One advising companies on human rights in the supply chain, we have found that understanding what workers really need can only be achieved through careful and continuous dialogue and communication.

Article One emphasizes communication, through 1) responsible purchasing standards, joint agreements, workflows, and implementation plans between companies and their suppliers to clearly lay out the expectations on both sides​ 2) responsible purchasing training for internal purchasing teams​ to encourage communication between internal teams and with suppliers, and 3) meaningful dialogue with workers and rights holders throughout the process to inform due diligence, purchasing practices, and risk mitigation.

• Collaboration. “We can’t do this alone,” was a common refrain from many companies. The sheer complexity of the problem is too great for each company to try and address it individually. It is much more meaningful and sustainable to work together to pool resources and knowledge in order to move forward in a positive way. A technology company representative described the importance of working together to find the best solution: “Responsibility comes with knowledge, thinking through where everything came from. We don’t need to wait to be regulated, we need to establish our own solutions early on, learn what we can, and actively collaborate with government, NGOs, suppliers…together we can be better.”

Not only is collaboration necessary among companies, but the supply chain labor compliance expert also highlighted the importance of collaborating with local NGOs and communities in order to build trust in order to create effective grievance mechanisms and provide meaningful remedy. Article One encourages and facilitates collaboration within sectors and across sectors to find meaningful solutions to address complex problems in the supply chain, including on worker engagement and supplier capability building.

• Commitment. Finally, in order to develop a forward-thinking vision for the supply chain of the future, businesses need to commit to going beyond just meeting the requirements of the regulations and requiring suppliers to engage in due diligence. They also have an opportunity to commit to a shared responsibility model with their suppliers to advance human rights in the supply chain. A key element of this shared responsibility model requires companies to engage in responsible purchasing practices. A representative focused on supply chain due diligence from a sustainable development strategies service provider, described five components that advance shared responsibility and encouraged companies to commit to them over time: 1) Integration, 2) Equal partnership, 3) Collaborative production planning, 4) Fair payment terms, and 5) Sustainable costing.

Article One works with companies to help them establish and advance their responsible sourcing commitments by supporting them in the design and implementation of shared responsibility frameworks and responsible purchasing practices with their key suppliers.

The three C’s are at the core of Article One’s supply chain strategy which offers a menu of options to help our clients build on the progress that they have made and create new systems and new ways of sourcing responsibly. The expert on global supply chain labor compliance summed it up when they said emphatically, “We need to refocus and understand that the biggest risk to business is the risk to its people.” Article One can work with companies to ensure that people are at the center of any strategy to re-envision the supply chain of the future. For more information, please contact hello@articloneadvisors.com.