How to Build an Ethical Supply Chain for Your Business

How to Build an Ethical Supply Chain for Your Business


Looking for suggestions on ensuring an ethical supply chain?

APICS Greater Detroit mission is to serve our local supply chain community with information and education needed to be successful in our ever changing world.

We are pleased to present the article below written by Derek Goodman, founder of Inbizability, on how to build an ethical supply chain for your business.

By Guest Author: Derek Goodman

As you prepare to restart your supply chain following the COVID-19 pandemic, it’s an ideal opportunity to reassess where your business sources its merchandise and materials. Does your supply chain align with your business’s values, or are purchasing decisions made only with the bottom line in mind?

Today’s consumers expect more from the brands they do business with. Research shows that millennial consumers in particular are increasingly looking to support values-based companies that weave social and environmental responsibility into the fabric of their business — their supply chain included.


What is an ethical supply chain?

Many customers want more than values-based messaging from the companies they do business with. They also want to know that the products they buy come from ethical sources. For consumers, that means doing businesses with companies that actively work to reduce their environmental impact and improve labor conditions throughout their supply chain.

Is an ethical supply chain worth the cost?

Consumers want ethical supply chains, but are they willing to pay for it? Luckily, the answer is yes. Per BusinessNewsDaily, two out of three consumers are willing to pay up to 25 percent more for goods that align with their values.

Not only that, but ethical companies perform better over time. Businesses listed as one of Ethisphere’s World’s Most Ethical Companies outperform other businesses by 14.4 percent over five years, IndustryWeek reports.


How to create an ethical supply chain

It’s clear that an ethical supply chain is not merely a cost, but an investment. However, taking the leap toward a more sustainable, equitable supply chain poses challenges for business.

Perhaps the biggest is the time investment required to thoroughly vet a supply chain. Modern supply chains are global and complex, making transparency difficult to achieve. To create a more ethical supply chain, SupplyChainBrain advises businesses to start by simplifying. Businesses should map out their supply chain in order to identify and eliminate unnecessary steps and use technology to increase visibility throughout their supply chain.

A simplified supply chain makes it easier for companies to take measures like regularly assessing supplier ethics and maintaining a history of supplier compliance. However, this work still requires more hands on deck. Companies that aren’t prepared to bring on full-time ethics and compliance personnel can turn to freelancers to fill this labor gap. Platforms like Upwork make it simple to find freelancers with the specific skills your business needs.

As an alternative to hiring freelance supply chain management and compliance consultants, businesses may opt to simplify their supply chain by moving to a dropshipping model. However, dropshipping doesn’t mean businesses can opt out of vetting their supply chain. Rather, it allows them to outsource supply chain management to a third party. The best dropshippers have the research and compliance expertise to find ethical suppliers on a company’s behalf.


Ethical supply chains and marketing

The work doesn’t stop with the supply chain. In order to reap the benefits of an ethical supply chain, companies also need to inform consumers about what’s happening behind the scenes.

Ethical marketing is a marketing strategy that showcases a brand’s commitment to its values. By putting its social and environmental responsibility on display, a business can capture consumers searching for ethical companies to support.

Moving toward an ethical supply chain takes work, but there’s no better time to do it than right now. As you prepare to restart your business, consider how you can leverage your supply chain to appeal to consumers and create longevity and sustainability for your company.

About the Author

Derek Goodman is an entrepreneur. He’d always wanted to make his own future, and he knew growing his own business was the only way to do that. He created his site Inbizability, to offer you tips, tricks, and resources so that you realize your business ability and potential now, not later.

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