We’ve discussed Environmental, Social and Governance (ESG) challenges in depth over the past few months as it’s a supply chain hot topic and one that stakeholders are increasingly informing their decisions based upon.
Our team of supply chain specialists have been working with several customers in-depth to help them achieve their ESG goals and they have developed a five-step process that outlines the best way to audit, analyse and act to drive ESG excellence.
The first step in the process is to centralise all of the data held on the current supply base, ready for analysis. We may be biased of course, but we fundamentally believe this should be in a simple, easy-to-use, shareable and self-serve cloud database like SourceDogg’s supplier master data platform.
Achieving ESG objectives rely upon a single, clear and comparable view of the suppliers you have at present, your spending with them, their ESG credentials and all of the criteria that can impact the overall strategy.
If you don’t have this in one place, cleansed and ready to analyse then performing a situation analysis is nigh on impossible. Whether it’s the percentage of local suppliers, diversity and inclusivity statements, the amount spends in SMEs and small businesses or carbon emissions performance – how can you audit without the data to hand in one place? It’s incredibly difficult to connect and merge different data sets even from a formatting point of view – so a central database solves these myriad issues immediately.
The next stage in the process is to visualise the supply chain base through detailed analysis against the ESG objectives and criteria you’re measuring. The centralised data enables this, but it’s important that the system you use to hold the data can also be linked via exports or API to a visualisation tool like Microsoft PowerBI.
This part of the process should be simple enough to turn your supply chain management team into insightful business analysts – able to slice and dice data quickly and easily for interpreting into intelligent action.
Once you’ve visualised the data, you can start to assess where you may have missing entries or if the picture isn’t quite as clear as it needs to be. Perhaps the data you have isn’t perfectly mapped to your objectives, so this is where supplier relationship management comes in to collaborate with your suppliers to plug those data gaps.
This data collection can be difficult and incredibly time-consuming without a self-service portal like SourceDogg. Furthermore, the collaborative process helps align your goals to the supplier and enables them to recognise what “good” looks like to you in this context. This is easily handled in supplier master data and supplier relationship management through scorecards and performance reviews against new ESG criteria.
Once you’ve made contact with your suppliers, that’s not the end of the story. There is often a job to do to look deeper into their suppliers too, incorporating tier 2 suppliers could be the ticket to unlocking ESG superiority.
An example of this may be that a particular supplier of pre-finished manufactured goods is part of a large conglomerate, but actually, their tier 2 base is a multitude of smaller, local manufacturers who are extremely diverse in their employment practice and carbon emissions neutral.
This deeper dive into the suppliers is only possible once data is collected and visualised and a collaborative, rather than contractual, relationship starts to flourish.
Plan & Act
Once you have all of this information to hand, you can start to plan and act towards those elusive ESG goals.
We’ve discussed exactly how to plan and structure your approach in this article, as not all suppliers are created equal.
This final step isn’t really the end however, it’s the next stage in a continual improvement process that leads back to the start. If you’re collecting data as your relationship develops then you’re proactively mitigating ESG risk and working towards net zero or a workforce that is more representative of wider society.
When you’ve made strategic decisions to trade more or less with certain suppliers, embed KPI’s and other measures of success – it’s much easier to manage this through a cloud platform like SourceDogg’s Supplier Relationship Management.
This is where moving towards a world where we use data to drive behaviour, not contracts is important. The carrot and stick approach doesn’t work with strategic, long-term suppliers so using a platform to discuss the data, rather than meetings full of anecdote and emotion win the day.
Let’s Get Started…
There’s no time like the present to get moving with your ESG programme in a data-centric way.
We’d love to show you the SourceDogg platform and discuss exactly how we’re working with other customers across a variety of industries to not only centralise and visualise their data but to also identify suppliers and enrich their supply chain data to meet business objectives and ESG targets too.
Get in touch today for a personalised demo with one of our supply chain experts.