INSIDE: ERADICATING CHILD LABOUR | PRODUCT RECALLS | DIVERSITY AS AN ETHICAL ADVANTAGE
THE OFFICIAL MAGAZINE OF THE SUPPLY CHAIN MANAGEMENT ASSOCIATION
Q3 2016
Corporate Responsibility in the Supply Chain People, planet, profit
EMPTY PROMISES ARE JUST THAT. You’ll hear “yes” a lot in this industry. Too bad just saying yes doesn't move product. Hub Group Canada knows that years of stability, a robust container fleet and tight control over operations does. At Hub Group Canada when we say “yes” to the customers we work with, we truly mean it. And that means your shelves will be full of more than just empty promises.
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A BEGINNER’S GUIDE TO WESTERN CANADA’S MAJOR INLAND PORTS Over the past year, many supply chain professionals have asked us “What are inland ports and where are they located in Canada?” Knowing what are the major Canadian inland ports is key to moving your products successfully across the country and calculating your total landed cost. For the purpose of this article, a major inland port is served by rail/container/ intermodal terminal. The following provides a snapshot of Western Canada’s inland ports:
1. ASHCROFT TERMINAL
Ashcroft Terminal is a privately owned inland port in British Columbia strategically located with both the CP & CN mainlines directly on site. Ashcroft is located 340 km east of Vancouver and 90km west of Kamloops. Ashcroft Terminal currently services all sectors of the Natural Resource Industries from Agriculture, Mining, Forestry and Oil & Gas by providing transloading, fleet management, railcar storage and logistics solutions.
2. PORT ALBERTA
Port Alberta is an industry-led economic development association based in the Edmonton Capital Region in Alberta, Canada. The city of Edmonton has a well-developed intermodal and freight distribution sector. It’s also Northern Alberta’s dominant commercial centre.
3. CALGARY REGION INLAND PORT Calgary Region has rapidly grown to become a major inland hub. Even the economic slowdown brought on by low oil prices hasn’t dramatically impacted the industrial real estate sector … it continues to see growth. The Calgary Region is one of Canada’s key inland intermodal distribution centres. It has an expanse of affordable industrial inventory for building, buying or leasing.
4. GLOBAL TRANSPORTATION HUB The Global Transportation Hub (CTH) Authority in Regina, Saskatchewan is Canada’s only autonomous and selfgoverning inland port authority.
The statutory corporation is responsible for marketing, financing, planning and attracting investment for an inter-modal transfer and logistics facility in Regina.
5. CENTREPORT CANADA
Located in Winnipeg, Manitoba, Centreport Canada is an inland port created in 2008 by provincial legislation called the CentrePort Canada Act. The Act established the mandate of CentrePort Canada and designated 20,000 acres to the tri-modal inland port. CentrePort Canada offers greenfield investment opportunities for a wide variety of business operations including distribution, warehousing and manufacturing. In addition to a 24/7 international cargo airport, CentrePort Canada provides access to three class I rail carriers and national and international trucking routes.
DOWNLOAD THE SUPPLY CHAIN’S GUIDE TO INLAND PORTS FOR MORE INFORMATION ON HOW THEY CAN LOWER YOUR COSTS AND MOVE PRODUCTS FASTER: www.inlandports.ca
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VOLUME 2 / NUMBER 3
QUARTER 3 2016
SUPPLY CHAIN MANAGEMENT ASSOCIATION 777 Bay Street, Suite 2701, Toronto, ON M5G 2C8 Toronto: 416-977-7111 | Toll-free: 1-888-799-0877 | Fax: 416-977-8886 Email: info@scma.com | www.scma.com EXECUTIVE OFFICE President & Chief Executive Officer: Cheryl Farrow (Paradowski) Manager, Executive Office: Jacintha Ward EDUCATION AND ACCREDITATION Director, Education & Accreditation: Rick Cleveland Coordinator, Education: Simona Zar
CORPORATE SERVICES Director, Corporate Services: Patrick Gauch Manager, Accounting: Wendy Fulton Accountant: Chloe Hong Administrator, Data Systems: Wilkin Hsien EDITORIAL BOARD Rhoderick Buendia, Katherine Caughran, Diana Gavrila, David Gillies, Michael Horricks, Carlene McTague, Erica Nelson, Loreen Sherman, Dorina Vendramin Supply Chain Canada is published four times per year for the Supply Chain Management Association (SCMA). Published by
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Direct Link......................... 7 Lien direct......................... 8 Message from the Board Chair................................ 9 SCMA National Board of Directors......................... 11 SCMA Institutes................ 11
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COVER STORY
Corporate Responsibility in the Supply Chain......... 12 A focus on people, planet and profit
ADVERTISING Sales Manager: Sharon Komoski Quinn Bogusky, Jason Cumming
Eradicating child labour in supply chains
Total Recall..................... 20 Communication and preparedness play key roles when it comes to successfully managing a product recall. Are you ready?
Ethical Supply Chain Management Includes Supplier Diversity............ 24 Supply chain professionals can’t ignore this critical facet of corporate social responsibility
A vision for the Procurement Group in the Government of Canada
DISTRIBUTION Nikki Manalo
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Little Labour.................... 16
Where Should We Go Part 1 and How Do We Get There?..................... 27
DESIGN & LAYOUT Art Director: Myles O’Reilly John Lyttle, Gayl Punzalan
© 2016 SCMA – All rights reserved. The contents of this publication may not be reproduced, in whole or in part, without the prior written consent of the publisher. Disclaimer: The opinions expressed by the authors and/or editorial sources contained in Supply Chain Canada are those of the respective parties and do not necessarily represent the opinion of the publisher or SCMA.
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To build leadership in supply chain management.
VISION
Employers recognize and value the contribution of supply chain management professionals to the success of their organizations.
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• We are Professional. • We are Collaborative. • We are Focused.
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Supply chain management is a superpower. Get the right things to the right people at the right time and do it better and more efficiently than anyone else. The concept is simple, but doing it well takes amazing skill and training.
Learn more about SCMA training and designation programs at scma.com
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DON’T MISS YOUR
Chance to Shine IN FRONT OF CANADIAN SUPPLY CHAIN LEADERS!
Canada’s premier conference for supply chain professionals is now accepting presentation proposals for the 2017 SCMA National Conference in Winnipeg, Manitoba. Share your knowledge and build your professional brand with hundreds of Canada’s top supply chain managers. Submit your presentation proposal today and prepare to tell your story of supply chain innovation with Canada’s top supply chain leaders. Deadline for submissions is: Sept. 23, 2016. For more information about the submission process, please visit: SCMA.com/2017Call.
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Continuing our Leadership of Professional Ethics for Supply Chain Managers
Cheryl Farrow (Paradowski) President & CEO SCMA
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AS THE FIRST PROFESSIONAL ASSOCIATION IN THE WORLD TO REQUIRE THAT ITS MEMBERS ADHERE TO A CODE OF ETHICS, IT IS NATURALLY A CORE ELEMENT TO SCMA. SCMA continually seeks to protect the reputation of our association and our profession. The SCMA Code of Ethics is just one of the tools we use to accomplish this goal. For those who would like to review the SCMA Code of Ethics, you can obtain a copy by visiting the SCMA website at www.SCMA.com/CodeofEthics.
SUPPLY CHAIN CANADA • QUARTER 3 2016 • 7
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he theme of this issue is timely. SCMA recently made administrative changes to processes related to the SCMA Code of Ethics that make it easier for our staff to identify those who have been sanctioned through the association’s Compliance and Discipline process. In the past, this information was only visible to staff in members’ home Institutes, so it was possible for a sanctioned member to simply move to another jurisdiction and re-join SCMA. Now all authorized membership administrators will have access to information on sanctioned members regardless of jurisdiction. There will also be a central repository of all Compliance and Discipline incidents, serving as a source of precedent and consistency. Where sanctions have been applied, that repository will also name the sanctioned member. As the first professional association in the world to require that its members adhere to a Code of Ethics, it is naturally a core element to SCMA. To fulfill our duty to provide guidance to our affiliated Institutes and their members on the standards of behaviour and ethical conduct with respect to membership in SCMA, we have committed to review our Code of Ethics every five years at minimum, and update it if appropriate. The last review of the SCMA Code of Ethics was conducted in 2011–12 by a volunteer task force committee that reviewed, researched and revised sections of the Code. A preliminary draft was completed, a legal review was undertaken and ultimately the changes were approved by the National Board of Directors. The work of the committee resulted in the addition of a preface and references to corporate social responsibility and sustainability, areas that were not previously addressed, but are becoming increasingly important aspects of reputational risk management and good corporate citizenship. A new governance and compliance section was added as well to give more teeth to the Code and to set out the policies and procedures detailing the disciplinary action a member or members would face if they are found to be in breach of the Code.
lien direct
Étique professionnelle pour les gestionnaires de chaînes d’approvisionnement, notre leadership se poursuit
Cheryl Farrow (Paradowski) présidente et chef de la direction AGCA national
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EN TANT QUE PREMIÈRE ASSOCIATION PROFESSIONNELLE AU MONDE À EXIGER QUE SES MEMBRES ADHÉRENT À UN CODE DE DÉONTOLOGIE, IL VA DE SOI QU’IL S’AGIT LÀ D’UN ÉLÉMENT CLÉ POUR L’AGCA. il n’avait jamais été question mais qui prennent de plus en plus d’importance dans la gestion du risque d’atteinte à la réputation et le maintien d’une bonne conscience sociale. Une section sur la nouvelle gouvernance et sur la conformité a aussi été ajoutée pour donner plus de mordant au Code et pour établir des politiques et des procédures qui décrivent dans le détail les actions disciplinaires prévues en case d’entraves au Code. L’AGCA cherche constamment à protéger la réputation de l’Association et de la profession. Son code de déontologie est un des nombreux outils qui lui permettent de poursuivre ce but. Il peut être consulté sur le site de l’AGCA à www.scma. com/fr/a-propos/adhesion-a-l-agca/code-de-deontologie.
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e thème de cette publication est des plus à propos. L’Association de la gestion de la chaîne d’approvisionnement (AGCA) a récemment apporté des changements administratifs aux procédures liées à son Code de déontologie, qui facilitent l’identification par son personnel des membres sanctionnés selon la procédure de l’AGCA relative aux fautes contre le respect ou la discipline. Par le passé, ces renseignements n’étaient visibles que par le personnel de la corporation du membre sanctionné, ce qui signifie qu’il était possible à un membre déchu d’aménager dans une autre province ou un autre territoire et de se joindre de nouveau à l’AGCA. Désormais, tous les administrateurs de l’adhésion autorisés auront accès aux renseignements relatifs aux membres sanctionnés de toutes les provinces et de tous les territoires. De plus, un dépôt central sera créé qui contiendra toutes les incidences de sanctions pour fautes contre le respect ou la discipline et servira de ressource pour trouver des précédents sur lesquels on pourra se fonder et assurer ainsi une constance dans les jugements. Pour chaque sanction appliquée, le nom du membre en faute sera indiqué. En tant que première association professionnelle au monde à exiger que ses membres adhérent à un code de déontologie, il va de soi qu’il s’agit là d’un élément clé pour l’AGCA. Afin de remplir notre devoir de guider les corporations affiliées et leurs membres sur les points relatifs au comportement et à la conduite éthique des membres de l’AGCA, nous nous sommes engagés à revoir notre code de déontologie au moins tous les cinq ans et à le mettre à jour au besoin. La dernière révision du code de déontologie de l’AGCA a été menée en 2011-2012 par un groupe de travail composé de bénévoles qui ont étudié le code, effectué des recherches, puis mis à jour certaines de ses sections. Une première version a été produite, puis a fait l’objet d’une vérification juridique avant d’être approuvée par le conseil d’administration national. Les efforts des bénévoles du groupe de travail ont résulté en l’ajout d’une préface et de références à la responsabilité sociale et à la viabilité de l’entreprise, des sujets dont
message from the board chair
Welcome to our new SCMA National Board of Directors
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17-member representative structure (consisting mainly of directors appointed by SCMA Institutes) to a competency-based model of between seven to nine members. Competency profiles were established to reflect the evolving role of the National Board, and a rigorous interview process was established to identify those with the required competencies to meet those needs. In addition to the competency profiles, some additional gaps that were identified on the board were related to C-suite
Photo: SCMA
he members of SCMA’s new competency-based National Board of Directors were officially confirmed at the 2016 SCMA Annual General Meeting in June. Our new and returning board members are now excited to get down to work. For those who aren’t familiar with the conversion of the old representative board model to the new, competency-based model, two years ago SCMA members voted in favour of changing our governance structure from a
Jerome Ferber, SCMP Board Chair SCMA
Back Row (left to right): Mike Owens, Andrea Englert-Rygus, LouAnn Birkett, Heather Stewart. Front Row (left to right): Mike Whelan, Jerome Ferber, Cheryl Farrow (Paradowski), Jim Peeples. Absent: John Liu. SUPPLY CHAIN CANADA • QUARTER 3 2016 • 9
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message from the board chair
and business-related experience, marketing, strategic planning and experience with global supply chain activities. For example, our new directors augment our knowledge beyond supply chain with additional skills, such as John Liu, CPA, CA, who brings with him extensive expertise in accounting, financial planning, not-for-profit boards and budgeting; and Andrea Englert-Rygus, who adds significant experience in human resources and information technology. Both Jim Peeples and Heather Stewart help to grow our depth of experience with transportation and logistics and both have been significant change agents in their respective organizations. Your new SCMA Board of Directors are as follows: ■■ Jerome Ferber, SCMP (one-year term) Board Chair ■■ Mike Whelan, SCMP (one-year term) Board Vice-Chair ■■ LouAnn Birkett, CSCMP (two-year term) Chair, Governance Committee ■■ John Liu (two-year term) Treasurer and Chair, Finance & Audit Committee ■■ Andrea Englert-Rygus (three-year term) Finance & Audit Committee member
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Mike Owens (three-year term) Governance Committee member Jim Peeples (three-year term) Governance Committee member Heather Stewart (three-year term) Education Committee member Cheryl Farrow (Paradowski) (ex officio) President and Chief Executive Officer
The new board includes four members of the previous Board of Directors (Mike Whelan, LouAnn Birkett, Mike Owens and myself), who have stayed on to maintain continuity during this transition and provide history on many of the issues that will be tackled by the new Board of Directors. As noted above, these board members have staggered terms that vary from one to three years to ensure we have a robust succession plan in place. You can find out more about your new Board of Directors by reading their bios on the SCMA National website and, as always, if you have any questions or comments, please feel free to reach me at jferber@scma.com.
board of directors
SCMA NATIONAL BOARD OF DIRECTORS 2016–2017
SCMA Institutes SCMA Alberta Tel: 780-944-0355 Toll-free: 1-866-610-4089 info@scmaab.ca | www.scma.com/ab SCMA British Columbia Tel: 604-540-4494 Toll-free: 1-800-411-7622 info@scmabc.ca | www.scma.com/bc SCMA Manitoba Tel: 204-231-0965 Toll-free: 1-877-231-0965 (for area code 204 only) info@scmamb.ca | www.scma.com/mb
Jerome Ferber, SCMP, C.P.M., P.Log. Board Chair
Andrea Eglert-Rygus Finance & Audit Committee
Jim Peeples Governance Committee
SCMA New Brunswick Tel: 506-458-9414 info@scmanb.com | www.scma.com/nb SCMA Newfoundland & Labrador info@scmanl.ca | www.scma.com/nl SCMA Northern Territories Toll-free: 1-877-231-0965 info@scmant.ca | www.scma.com/nt
Mike Whelan, SCMP Board Vice-Chair
John Liu, CPA, CA, BComm. Treasurer, Finance & Audit Committee
Heather Stewart Education Committee
SCMA Nova Scotia Tel: 902-425-4029 info@scmans.ca | www.scma.com/ns SCMA Ontario Tel: 416-977-7566 Toll-free: 1-877-SCM-N-YOU info@scmao.ca | www.scma.com/on SCMA National Office Tel: 416-977-7111 Toll-free: 1-888-799-0877 info@scma.com | www.scma.com
LouAnn Birkett, CSCMP Governance Committee
Mike Owens Governance Committee
Cheryl Farrow President & CEO Supply Chain Management Association
SCMA Quebec Tel: 514-256-0045 info@scmaq.ca or info@agcaq.ca www.scma.com/qc/en SCMA Saskatchewan Tel: 306-653-8899 Toll-Free: 1-866-665-6167 info@scmask.ca | www.scma.com/sk
SUPPLY CHAIN CANADA • QUARTER 3 2016 • 11
Corporate Responsibility in the Supply Chain A focus on people, planet and profit By Kim Biggar
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ocial change and profit are not mutually exclusive; a company working toward both can achieve both. This is increasingly understood in the business world, and its impacts are being felt throughout the supply chain. In fact, many of a company’s ethically fraught decisions – and its reputation – rest in the hands of its supply chain employees. The choices they make can have widespread effects, both positive and negative. According to Larry Berglund, a supply chain management consultant and author of Good Planets are Hard to Buy: A Management Handbook for Creating Conscious Capitalism, Sustainability Principles and Supply Chain Excellence – and 2016 Fellow of SCMA – the 2001 Enron debacle kick-started the corporate social responsibility (CSR) movement. Numerous other high-profile cases since then have heightened public awareness of corporate bad behaviour, and increased the call for a more ethical approach to business operations. Such incidents led in 2002 to the creation of the SarbanesOxley Act in the U.S., legislation aimed at preventing accounting fraud. Similar laws were subsequently passed in other countries, including Canada. On another front, supplier codes of conduct have become increasingly common; many are based on the labour standards of the International Labour Organization (ILO). The International Organization for Standardization (ISO) has also helped to set and promote standards for social responsibility; in 2010, it launched ISO 26000:2010, to help clarify what social responsibility is, help businesses and organizations translate principles into action and share best practices relating to social responsibility. “People are hungry for a sense of purpose,” said Paul Klein, founder and CEO of Impakt Corp., a Canadian consulting firm that helps its clients profit from social change. “Ethical corporate behaviour provides opportunities. It helps companies to attract and engage employees and increases the productivity of those employees. It can have an impact on financing for 12 • SUPPLYCHAINCANADA.CA • SCMA
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SUPPLY CHAIN CANADA • QUARTER 3 2016 • 13
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projects, for example in the mining industry. And it strengthens customer and supplier relations.” In addition to boosting opportunities, says Klein, ethical behaviour reduces corporate risk. Policies and procedures designed to ensure ethical outcomes minimize the likelihood that a company will find itself the target of public outcry or legal proceedings.
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STRIVING FOR SOCIAL CHANGE AND CORPORATE PROFIT “Profit is not a dirty word,” said Klein, while he describes the CSR initiatives of some of the corporate world’s mostsuccessful players. Such companies, he says, have an agenda to help solve social problems; they are not involved simply for the sake of optics. Berglund agrees – as western societies have matured, he says, people have come to expect businesses to do good in addition to making money. In terms of supply chain-related efforts, Klein cites Goldcorp as an innovative company looking for ways to improve its operations while respecting the environment. At its Porcupine Gold Mines, for instance, the company has implemented a reprocessing project to turn reject materials into recovered and/or recycled steel. Walmart, the world’s largest brick-andmortar retailer, is doing what Klein refers to as remarkable work with suppliers to reduce packaging and waste. While undoubtedly these efforts pay off for the companies by reducing their costs, in both cases they also have a wider positive impact in terms of environmental sustainability. On the other hand, as recently as early 2016, slave labour was reported to be used in Thailand’s fishing industry. A December 2015 report by the Institute for Global Labour and Human Rights looked at the manufacture under harsh and abusive conditions at a Chinese factory of toys for Disney, Hasbro, Mattel and other companies. The 2013 collapse of the eightstorey Rana Plaza building in Bangladesh killed more than 1,100 garment workers who had been forced to enter the clearly dangerous building, and injured about 2,500 more. 14 • SUPPLYCHAINCANADA.CA • SCMA
That such conditions remain in place for workers around the world is a testament to the amount of work still to be done. Fortunately, there are people with the means to bring change. Among them are the purchasing and procurement employees of companies and organizations that buy from China, Bangladesh, Thailand and many other countries, either directly or indirectly; their buying power can be used to influence change.
MAKING REASONABLE BEST EFFORTS The bad-news stories we hear about abuses of workers or the environment are usually followed by negative impacts on the companies that perpetrate those abuses and on those that buy from the companies. Public protest is noisy and damaging: sales decline, share values fall, bond ratings drop. It can take years for a company to recover. Look at Loblaw, for instance. Three years after the Rana Plaza disaster, Loblaw is providing long-term financial compensation to the victims and their families. It is also preparing to defend itself against a $2-billion class action lawsuit that claims Loblaw had indirect liability for the workers employed by its sub-contractor. In an Oct. 24, 2013 article, The Globe and Mail wrote, “Companies like Loblaw place their garment orders through middlemen, who also outsource the work, leaving Loblaw and other retailers unable to trace where exactly their clothing was being made.” Certainly since Rana Plaza, some retailers are making a much greater effort to trace the supply chain for their products. “Nobody expects perfection,” said Berglund of companies and their employees that are working to improve the ethical performance of their supply chains. The process is complicated, requiring time and commitment. And even when things seem good, they require ongoing monitoring. Including a supplier code of conduct in the contract with a supplier makes ethical performance a requirement. Noncompliance with the code is a breach of the agreement and
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“PEOPLE ARE HUNGRY FOR A SENSE OF PURPOSE.” – PAUL KLEIN, CEO, IMPAKT CORP.
reason to end the relationship. The ILO’s labour standards, often used as the basis for a supplier code of conduct, cover such subjects as child labour, forced labour, working time, discrimination, training and occupational health and safety. Having a code of conduct is an important step, but monitoring is essential. No company should accept on good faith that suppliers are living up to their commitments. “This can’t be left to the honour system,” said Berglund. Factory inspections by third-party auditing companies and NGOs are increasingly common, especially in countries with a reputation for worker abuse. Regarding social compliance, inspectors review policies, practices and facilities in terms of fire prevention and response, worker safety, environmental impact, child labour and so on. (It’s important to note a couple of complications here that make some of the conduct assessment tricky: as Klein says, in some countries, families depend on the income their children make; in China, if not other countries, workers often welcome long hours on the job in order to make more money. These facts can be muddling; they might make meeting international labour standards undesirable in some cases.) Due diligence by Canadian companies requires this “sleuthing,” according to Berglund. Buyers should be making “reasonable best efforts,” he says, to hold their suppliers – and the suppliers to their suppliers, if they buy in large quantity – to prescribed labour standards. Inspections should be done every six months or so, he notes, to ensure ongoing compliance. “You want to make sure suppliers’ ‘video’ matches their ‘audio’ – that they’re doing what they’re saying.” Klein believes that some of the monitoring should be done directly by the individuals responsible for decision-making and contract management. Further, it’s important, he says, that corporate leaders also visit the facilities of their suppliers.
They should be seen to take a real interest in the conditions under which suppliers’ employees work, to convey the message that this is important at the highest level of the company. If an audit uncovers a serious problem with one of your suppliers, Klein urges that you be proactive: publicly acknowledge the issue, state that it is contrary to your policies and share your plan to deal with the problem. Be aware, too, that some activities that are not illegal may not pass the ethical test, as Berglund says. For example, a supplier that operates in Canada but maintains headquarters offshore in order to avoid paying corporate tax is not meeting the standards of corporate social responsibility.
THE BENEFITS OF CORPORATE SOCIAL RESPONSIBILITY The benefits of ethical corporate performance for the environment and for workers employed in factories and other production facilities around the world are clear, to some degree. As Klein says, though, good ethics lead to more than fair and safe work environments. With good jobs, people tend to have better health. They can afford to keep their children in school. Family violence, crime and community dependence on charity decrease. Good ethical conduct also offers plenty of advantages to the companies that undertake it. According to Berglund, ethical enterprises provide meaningful work for people and add value to the communities in which they operate. Employees are inclined to stay. (Patagonia, Inc., for example, which Berglund cites as a model for corporate responsibility, has reported staff turnover of about four per cent, he says, in an industry that has an average annual turnover of about 20 per cent.) The good reputation that corporate responsibility fosters also offers a recruitment advantage. Together, the recruitment and retention benefits save a company time and money. A good reputation can also pay off with growth in market share and, thereby, an increase in revenue. Companies that value social responsibility know that financial profits and ethical performance can be achieved together. SUPPLY CHAIN CANADA • QUARTER 3 2016 • 15
Little Labour Eradicating child labour in supply chains By Heather Hudson
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child labour
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he field is massive – acre after acre packed with coffee trees as far as the eye can see. The Guatemalan sun is punishing. Workers toil upwards of 12 hours a day tugging ripe cherries – the basis of our morning coffee. It’s only when you look down, low at the base of the trees that you’ll see the plantation’s youngest workers, crawling around on their hands and knees from morning till nightfall, painstakingly watering each tree from two-litre soda bottles. “I met a little girl who was about eight years old, [she was] pretty small. She spends hours carting water in bottles, going tree by tree to water each one. We’re talking hectares,” said Cheryl Hotchkiss, manager of WorldVision Canada’s No Child for Sale campaign. “She was extremely proud of what she does. But all I could think about was the weight of those bottles on her little body. The impact on her growing body and bones has to be significant.” For Hotchkiss, that little girl represents the millions of children who suffer in jobs that are considered “dirty, dangerous and degrading” – the antithesis of a healthy childhood. An additional 5.5 million children are forced into working in incredibly risky circumstances by virtue of their geography and poverty. In a global economy where supply chains span multiple countries and organizations, supply chains have never been so complex. How can you tell if your company is unwittingly using child labour? What can you do about it?
ACCORDING TO THE INTERNATIONAL LABOUR ORGANIZATION, AN ESTIMATED 168 MILLION CHILDREN ARE ENGAGED IN CHILD LABOUR IN COUNTRIES RICH WITH NATURAL RESOURCES.
SUPPLY CHAIN CANADA • QUARTER 3 2016 • 17
child labour HOW BIG IS THE CHILD LABOUR PROBLEM? According to the International Labour Organization, an estimated 168 million children are engaged in child labour in countries rich with natural resources, such as India, Pakistan, Bangladesh, Uzbekistan (cotton, garment industry), Latin and Central America (coffee production), Thailand, Vietnam (aquaculture), the Ivory Coast and Ghana (cocoa). Of those child labourers, 85 million do work detrimental to their health and wellbeing. This type of work puts a child’s physical and mental health at risk and affects their ability to attend school because of the nature of the work, and also results in injuries. “I’ve seen children working in cocoa who use rudimentary machetes. Their legs are sliced open and they’re missing pieces of fingers because there’s no safety equipment. And they’re working there because cocoa pods grow really low on trees, so it’s easier to have children do it,” said Hotchkiss.
HOW DO YOU KNOW IF CHILD LABOUR IS USED IN YOUR SUPPLY CHAIN? Knowing your supply chain is the first step. In large or complex supply chains, Simon Chorley, manager of international programs at UNICEF Canada, recommends conducting a social baseline assessment. If your company does business with suppliers in developing countries, find out: “What’s the age of school completion? What’s the legal age of work? Is there a grey zone in which there’s no more education but they can’t legally work yet? What’s the living wage? Look at the prevalence of child labour, the quality and quantity of education and employment available and get a basic social-cultural understanding of the country.” The U.S. Department of Labor conducts research projects regularly on goods produced by forced labour, which can offer an indication of where the problems of child labour have been identified. There are also an increasing numbers of companies making a business out of helping companies investigate supply chains. They can provide different levels of support to a company wanting to assess risk. Consulting amongst the members of your industry is also a helpful starting point so that a coordinated effort can be made.
RECOMMENDATIONS FOR CANADIAN COMPANIES
Source: WorldVision Canada nochildforsale.ca
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WHAT SHOULD YOU CONSIDER WHEN CONDUCTING A RISK ASSESSMENT?
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Importing goods from countries with known child- and forced-labour risks does not mean that a company or its suppliers has done anything wrong. It does, however, mean that appropriate steps should be taken by companies to assess and mitigate these risks and proactively disclose these efforts. WorldVision Canada encourages all companies to take the following steps: 1. Make a commitment to address child and forced labour 2. Assess where your supply chains are at risk 3. Implement strong policies and due diligence processes to ensure they are lived out, including: a. Supplier codes of conduct prohibiting child and forced labour b. Staff and supplier training to raise awareness and build capacity to monitor and implement these standards c. Unannounced, third-party supplier auditing to measure compliance d. Formal, accessible grievance mechanisms to report violations of standards and a process for responding to reported violations 4. Clearly and publicly disclose the steps you are taking to address the risks of child and forced labour in your supply chains, providing consumers and investors with meaningful, comprehensive information 5. Engage in dialogue on these issues with consumers, NGOs, investors and other companies
Hotchkiss says the next layer of questioning for your suppliers is learning about their codes of conduct, recruitment processes, compliance with national and international regulations, factory management, age verification processes and more. “One of the things we look for is a commitment to true compliance of their code of conduct,” she said. “Are they calling in an outside body to help them look at their system to make sure they’re doing what they say they are? Are they working in partnership with others in the industry to improve practices? Have they worked with communities at risk? Do they have a good relationship with local community organizations, leaders and government as part of their business practices?”
child labour Companies should have regular line of sight to public reports, basic worker rights such as grievance processes, audits and more. The more information that is available demonstrates a willingness to be transparent. The United Nations Global Compact has a reporting mechanism online where companies worldwide can post their reports for ultimate transparency. Chorley says it can be very tricky to get information if your company doesn’t have someone on the ground or you have a multi-tier supply chain. In that case, he says companies should work in partnership with a trusted third party in the community. “Local NGOs or community-based organizations with experience in the technical side of things are going to get answers you wouldn’t otherwise be able to access,” he said. “They can do regular, unannounced spot checks on each level of your supply chain.”
Boycotting is not an answer and can often exacerbate tenuous circumstances for vulnerable people, including children, in developing countries where labour laws are lax, at best. Chorley says part of the responsibility of a company that does work in a developing country is to remove children in a safe way from a workplace and have alternatives for them in education or training. “Refer to the local government authorities responsible for child protection or a trusted local for support. Look at how you can hire an adult member of the family in place of the child that you’ve removed so income continues to benefit that family.”
WHAT IS BEING DONE IN CANADA TO REDUCE CHILD LABOUR? Companies like MEC and Gildan Activewear are taking strong measures to address concerns in their factories in developing countries. Gildan uses a “vertically integrated” manufacturing model with direct ownership of most of its production process. This gives the company oversight and control over its supply chain. It also maintains a sustainability website outlining its social-compliance efforts. Smaller companies are visiting their suppliers regularly or limiting their supply to subcontractors or solely with contractors with whom they’ve built a long, trusted relationship. “Child labour is a complex problem with multiple solutions and everybody plays a part in it. We have to facilitate conversations that will lead to sustainable solutions. We can create conditions where things can improve over time,” said Hotchkiss.
HOW DO COMPANIES KNOW THEIR EFFORTS TO PREVENT CHILD LABOUR ARE WORKING? Hotchkiss says it comes down to annual check-ins to see if progress is really being made. Third party organizations can help make sure the solution is lasting and that mechanisms are in place for whistle blowers who can share concerns without being at risk.
“ I’VE SEEN CHILDREN WORKING IN COCOA WHO USE RUDIMENTARY MACHETES. THEIR LEGS ARE SLICED OPEN AND THEY’RE MISSING PIECES OF FINGERS BECAUSE THERE’S NO SAFETY EQUIPMENT. AND THEY’RE WORKING THERE BECAUSE COCOA PODS GROW REALLY LOW ON TREES, SO IT’S EASIER TO HAVE CHILDREN DO IT.” – CHERYL HOTCHKISS, MANAGER, WORLDVISION CANADA’S NO CHILD FOR SALE CAMPAIGN
“I’m really optimistic. We started the No Child for Sale campaign three years ago and we see companies who are more willing to accept the challenges and be open to conversations,” she said. “All kinds of things are happening globally that represent work at the local level in the supplier and consumer country. I only see that increasing in the years ahead.” SUPPLY CHAIN CANADA • QUARTER 3 2016 • 19
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WHAT SHOULD YOU DO IF YOU FIND CHILD LABOUR IN YOUR SUPPLY CHAIN?
TOTAL RECALL Communication and preparedness play key roles when it comes to successfully managing a product recall. Are you ready? By Jess Campbell
T
hese days, you would be hard-pressed to go a week without seeing a recall for a consumer product, regardless of the industry. As consumers, product recalls are important and can affect our daily lives. Car seats. Food. Electronics. Vehicles. Prescription medications. Any consumable product is at risk of being recalled and chances are, at some point, they will be. No matter which end of the supply chain you’re on, recalls are never easy or simple. But as a supply chain professional, knowing more about the recall process and making sure your company is doing its part to prepare for one will help alleviate stress if and when a recall does happen, not to mention keep your supply chain – and your customers – as informed and as safe as possible.
THE LAW OF RECALLS Product liability is essentially where the true understanding of product recall begins. Doug Harrison is a senior partner at Stikeman Elliott LLP in Toronto, and the author of The Law of Product Recalls and Warnings in Canada (LexisNexis Canada, 2013). When speaking about product liability, he emphasizes the importance of securing an adequate contract with your upstream supply chain partners to protect yourself and others within the supply chain. 20 • SUPPLYCHAINCANADA.CA • SCMA
“It’s important for people down the supply chain to protect themselves by making sure that they can turn to the person [ from whom they received a product] for an indemnity for their costs and expenses if something goes wrong,” said Harrison. A branch of the law that deals with the consequences of failure to consider product safety, product liability leaves all points in the supply chain open to responsibility should something go
wrong. However, the ultimate responsibility falls on the manufacturer, which can be problematic if that company is difficult to locate or no longer exists when an issue with the product is reported. This is why, according to Harrison, insurance in this area – including recall insurance, although it’s relatively new – is just as important as securing an iron-clad contract with your supply chain partners.
When it comes to product recalls, finding the line between manufacturer and consumer responsibility can be tricky, especially when consumers continue to use a product once it has been recalled. “It’s a bit of a judgment call to weigh the balance between the risk that’s out there and what you need to do to get the word out and warn people,” said Harrison. “The more you’re SUPPLY CHAIN CANADA • QUARTER 3 2016 • 21
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product recalls
product recalls
Paul McKinnon/Shutterstock.com
Ikea recalled millions of dressers in the United States, Canada and China dealing with a vulnerable group that is exposed to the risk – for example, children – or the more severe the risk is, the farther the manufacturer or retailer needs to go to get rid of the risk.” An example is the massive recall of dressers issued by Ikea in June 2016. Prompted by the reported deaths of several U.S. children after the dressers fell on top of them, Ikea recalled millions of dressers in the United States, Canada and China. In 2015, the company had issued repair kits for the dressers so that consumers could properly secure them to the wall and drastically improve the stability of the product. However, Ikea then had to revisit that decision and go forward with a full recall of the product when it continued to be a risk to consumers. No matter whether a recall is as massive as Ikea’s or on a smaller scale, navigating the legalities of taking back a product are daunting. You need to be sure you’re doing everything right so as not to cause further strife to the supply chain or the consumer. At this time, there are no protocols for recalls established by law in Canada for most products. “Health Canada and the Canadian Food Inspection Agency (CFIA), among others, have released guidelines on how to conduct recalls of particular types of products, including pharmaceuticals, cosmetics, food and consumer products generally,” said Harrison. These guidelines have been developed 22 • SUPPLYCHAINCANADA.CA • SCMA
over the past several years by these and other agencies, detailing what to do in the case of a recall and, equally important, how to develop a recall plan. While they don’t have the force of law, says Harrison, supply chain professionals can feel safe taking their advice.
PLAN TO RECALL If your company has never experienced a recall of one of your products, you should count yourself lucky – and then make sure you have a plan in place for when a recall does happen. “It’s pretty tough to prevent a recall if you’re not the company that designed and manufactured the product. All you can do is be prepared for when an emergency comes up. Have a plan that you can follow,” said Harrison. Websites such as Health Canada and the CFIA have industry guides for recalls and how to develop a plan for one. Once you’ve established your plan, the best way to make sure it works is to practice by conducting a mock recall. Just like a fire drill or a lockdown, mock recalls will help you become more comfortable and knowledgeable with what to do if and when you experience an actual recall. Effective, efficient communication, both internally and externally, is the key component to a recall plan that works.
product recalls
“ALL YOU CAN DO IS BE PREPARED FOR WHEN AN EMERGENCY COMES UP. HAVE A PLAN THAT YOU CAN FOLLOW.” – DOUG HARRISON, STIKEMAN ELLIOTT LLP
The decision to order a recall of a consumer product comes from, in most cases, a judgment call made by the manufacturer. “Is the risk so severe that we need people to stop using the product and give it back to us? Most people will err on the side of caution,” said Harrison. In recall situations, the goal is to remove the product from shelves and consumers as quickly and safely as possible, minimizing any further risk of injury. To achieve this, you must communicate with your supply chain and with the people who have trusted you enough to buy your product. “Everybody in the supply chain is individually exposed. You want to make sure you’re in communication with the people up the chain from you to make sure they’re doing what they are supposed to be doing,” said Harrison. Having practiced what to do during your mock recall scenarios will improve communication and help ensure a recall
that could perhaps even be deemed successful. Although it might seem an odd concept, there are right and wrong ways to handle product recalls. Again, communication is in the forefront when it comes to handling a recall well. “There are many examples of companies who have done well with recalls. A good Canadian example is Maple Leaf Foods,” said Harrison. “They got out in front of the problem and were honest with consumers, which is key. The Johnson and Johnson Tylenol recall is another example. They did a fabulous job to make sure no stone was left unturned and that no one would get hurt.” Nobody wants to issue a recall of their product, but the reality is that they happen every day. Have a plan in place, practice that plan and communicate with your supply chain and your customers to make sure you come out ahead if and when a recall happens to you.
Nominate a supply chain leader for an SCMA Award of Distinction SCMA is looking to celebrate remarkable individuals and organizations that advance the supply chain profession through innovation and thought leadership. SCMA is now accepting nominations for the 2017 Awards in the following categories: • Ascendant Award • Fellow Designation Award • Supply Chain Excellence Award • SCMA Sustainability Award More information about these awards and the nomination process can be found at: SCMA.com/Awards. Deadline for nominations is: Nov. 30, 2016.
SUPPLY CHAIN CANADA • QUARTER 3 2016 • 23
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Ethical Supply Chain Management Includes Supplier Diversity
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diversity
Supply chain professionals can’t ignore this critical facet of corporate social responsibility By Cathy Gallagher-Louisy
E
thical supply chain management is an important business social responsibility and reputational risk issue, and a significant differentiator from the competition for many businesses. When most of us think of ethical supply chain management, we consider initiatives such as eliminating the use of sweatshops in developing countries or ensuring that there are safety, environmental and labour standards in the factories that are manufacturing our goods. However, there is another element to ethical supply chain management that hits closer to home: supplier diversity. Organizations are now viewing supplier diversity as an important part of ethical supply chain and corporate social responsibility initiatives. According to a recent study by the Canadian Centre for Diversity and Inclusion (CCDI), many Canadian organizations are specifically leveraging supplier diversity as part of their approach to social responsibility initiatives and local community economic development.
WHAT IS SUPPLIER DIVERSITY? According to Patricia Richards, manager corporate supplier diversity at Shell Oil Company, and Steve Ballenger, CPM, strategic supplier performance at Lockheed Martin, supplier diversity can be defined as: “A process that seeks to identify diverse supply partners and systemically integrate inclusive practices” into our supply chain management processes. Another approach was developed by business professors Monder Ram and David Smallbone, which describes supplier diversity as “a proactive business process that seeks to provide suppliers equal access.” The Chartered Institute of Procurement and Supply (CIPS) suggests that supplier diversity refers to: “Initiatives that aim to increase the number of diverse (e.g., minority-owned, womenowned) businesses that supply goods and services to both public and private sector organizations, either directly or as part of a wider emphasis on smaller enterprises in general.” Supplier diversity is an ethical issue because it seeks to provide access to compete for bids to small and medium sized businesses owned and operated by people who have
traditionally not had the networks or access that would enable them to compete with bigger, well-established competitors.
CONNECTING SOCIAL RESPONSIBILITY AND SUPPLY CHAIN MANAGEMENT Major frameworks that guide supply chain professionals and corporate social responsibility practitioners point to supplier diversity as a connection point between ethical supply chain management, social responsibility and the increasing focus on the business value of diversity and inclusion. The Institute for Supply Management (ISM) includes “Diversity and Inclusiveness – Supply Base” among its nine principles of sustainability and social responsibility. The Institute states, “The attraction and retention of a diverse supply base is the responsibility of each supply professional,” encouraging supply chain professionals to “provide diverse suppliers the opportunity to participate in sourcing opportunities and promote inclusion of diverse suppliers in the organization’s supplier development and mentoring programs.” In many organizations, corporate social responsibility, supply chain management and diversity initiatives may be in distinct silos. Diversity and inclusion may be in the human resources division; social responsibility and sustainability may be its own unit or housed under corporate affairs, governance or public relations and marketing; and ethical supply chain, sustainable supply chain and supplier diversity initiatives are often handled by different people within the supply chain or procurement function. There are a host of missed opportunities and missed synergies when these functions are kept separate, siloed and disconnected. Supply chain professionals can be the connector between disparate factions of our organizations, ultimately providing tremendous value to the business.
SUPPLIER DIVERSITY FOR COMMUNITY IMPACT CCDI’s study, Supplier Diversity in Canada (the first and only national study on supplier diversity in Canada), found that one of the key benefits of supplier diversity is community impact.
Improves our organization’s local community impact
95.2
Improves our organization’s social standing
95.0
Broadens our supplier base
85.0
Improves our corporate image/brand reputation
80.0
Matches demographics of consumers in our target markets
77.8
Creates new business opportunities
75.0
Improves our organization’s supply chain performance
73.7
Figure 1. Top motivators for supplier diversity
Canadian Centre for Diversity and Inclusion
SUPPLY CHAIN CANADA • QUARTER 3 2016 • 25
diversity IN MANY ORGANIZATIONS, CORPORATE SOCIAL RESPONSIBILITY, SUPPLY CHAIN MANAGEMENT AND DIVERSITY INITIATIVES MAY BE IN DISTINCT SILOS … THERE ARE A HOST OF MISSED OPPORTUNITIES AND MISSED SYNERGIES WHEN THESE FUNCTIONS ARE KEPT SEPARATE, SILOED AND DISCONNECTED. In the survey, this was the number one motivator for supplier diversity programs. In the interviews conducted for CCDI’s study, community impact was described extensively not only as a motivator for supplier diversity but also one of the two primary benefits derived from the practice. Community development, relationships in the community, community capacity building and economic empowerment and improved brand reputation are all outcomes of supplier diversity as well as important goals of corporate responsibility and ethical supply chain programs.
COMPANIES LEADING THE WAY A few organizations examined through CCDI’s study on supplier diversity in Canada expounded on how they deliberately leverage supplier diversity for social responsibility. Enterprise Holdings, Inc. (EHI) is a rental car company headquartered in the U.S., which operates the Alamo Rent A Car, Enterprise Rent-A-Car and National Car Rental brands throughout North America. Lee E. Lewis, global supplier diversity manager at EHI, specifically discussed the connections and synergies between supplier diversity and social responsibility at EHI, and describes how EHI leverages supplier diversity for local community impact and improved brand recognition. In terms of strengthening communities, Lewis said, “We operate all over North America, so it just makes sense for us to have local relationships within the communities where our employees live, shop, worship, go to school and raise their families. We want to have great community relationships and part of that includes doing business with local suppliers. We recognize that we are part of a very large economic engine. When we hire local, this helps build small local businesses, so they can hire more people, who can ultimately have the opportunity to rent our cars. So that’s the perfect business case for us – local economic development.” Lewis added, “Don’t forget, Enterprise started as a small business – one guy with seven cars. And today, we have 80,000 employees, a million and half vehicles and 10,000 locations. So we know first-hand that a small business can grow to have a tremendous economic impact. I think that the more that we reach out to minority-owned business and small businesses, the more that we can contribute to the economy, to the benefit of everyone.” TD Bank Group sees supplier diversity as a strategic component of their corporate responsibility strategy. TD developed and launched their supplier diversity program North Americawide in 2011. Marcia Seymour, senior manager, Procurement Corporate Responsibility at TD Bank Group, said, “The concept of diversity and inclusion has long been embedded in TD’s value system. 26 • SUPPLYCHAINCANADA.CA • SCMA
We want customers to feel welcomed and valued, and employees to bring their whole selves to work. So, with that as our foundation it made perfect sense to extend those principles to our suppliers.” With this initial driving force, Seymour says that over time, they started to understand the opportunity supplier diversity presented and the other benefits it could bring. TD’s responsible procurement policy embeds a wide range of ethical and sustainability criteria into TD’s sourcing practices and decisions. Prospective suppliers must complete a questionnaire that encompasses their: ■■ Corporate responsibility performance ■■ Health and safety record ■■ Human rights and labour practices, including child or forced labour ■■ Diversity and inclusion efforts ■■ Code of conduct, ethics and anti-bribery/anti-corruption practices ■■ Environmental sustainability efforts “We also ask our potential vendors and suppliers about their focus on diversity and about their own supplier diversity initiatives,” said Seymour. Thus, TD is encouraging increased diversity down through the supply chain.
THE IMPORTANCE OF SUPPLY CHAIN PROFESSIONALS Supply chain professionals have a tremendous impact on an organization’s practices and reputation. Through incorporating supplier diversity into ethical supply chain and social responsibility initiatives, supply chain professionals can have a direct impact on local economic development, as well as their company’s reputation and relationships in the communities where they operate. Cathy Gallagher-Louisy is director, Knowledge Services at the Canadian Centre for Diversity and Inclusion (CCDI). She leads the research and knowledge services portfolio at the CCDI and has authored or co-authored 10 research/benchmarking reports on diversity and inclusion and corporate social responsibility. Supplier Diversity in Canada is the first national benchmarking study on the topic in Canada, produced in collaboration between the CCDI and the University of Manitoba. Research took place over a year and included a content analysis of organizations’ websites and documents, a survey that received responses from 242 organizations and in-depth interviews with 11 organizations of varying sectors and industries to learn more about their supplier diversity programs. Read the full report here: www.ccdi.ca/Supplier-Diversity-In-Canada-Report
procurement
Where Should We Go and How Do We Get There?
Part 1
A vision for the Procurement Group in the Government of Canada By Jessica Sultan
T
his series was inspired by the reflection exercise portion of the federal government Comptrollership Leadership Development Pilot Program, which ran from December 2015 to March 2016. The program was developed in partnership with the Telfer School of Management, University of Ottawa and the Office of the Comptroller General, Government of Canada to promote greater horizontal collaboration and to sharpen business acumen of our next generation of leaders, and further develop leadership competencies through self-reflection and interactions with senior officials. The procurement group within the Government of Canada is undergoing a period of rapid transformation. Effectively managing these changes will require a change of mindset – a move
away from working in “silos,” considering only the challenges in our own departments, and toward adopting a broader vision of community. It can no longer be an environment of departments scrambling to retain scarce resources. Look around: the current reality isn’t working. Sharing resources and information will result in greater efficiencies for the government as a whole. A purchasing and supply (PG) community will lift the focus up and out of specific departments and into a group able to fulfill the work required across the federal government. Different departments have unique procurement needs, so a centralized, shared service model isn’t the answer. Rather, we must look at a networked PG community as a way to share resources, information and people more freely among SUPPLY CHAIN CANADA • QUARTER 3 2016 • 27
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This three-part series explores the challenges and opportunities for the procurement group within the Government of Canada. Part 1 introduces the department and outlines its current challenges. Parts 2 and 3 will explore how the group can move toward its vision of the future and the current work underway to achieve those goals.
procurement THE PG FUNCTION IS EXPERIENCING A FUNDAMENTAL CHANGE TO ITS CORE BUSINESS, MOVING AWAY FROM A ROLE AS A RULE ENFORCER TO THAT OF KEY BUSINESS ENABLER. organizations to fully leverage the resources available to the federal government as a whole.
AN AGENDA OF INNOVATION AND CHANGE: THE TIME IS NOW Today’s reality calls for leaner organizations and improved efficiencies. We must share people, effort and knowledge. The PG community needs to be considered as one group, without restrictions, across the federal government. The efficiencies that could be gained if we worked together are staggering, and would free up resources to address the real backbone of the PG community: procurement. Smart management of the procurement function is essential. We must intelligently use our limited resources to obtain the best possible outcomes. The key to success is in how we step up and manage the challenge. We need to shed the old ways of doing things, push an agenda of innovation and transformation and work intelligently.
TO WHOM DOES THIS APPLY? There are three distinct groups of PG employees within the federal government: those at Public Services and Procurement Canada (PSPC), those at the Department of National Defence (DND) and “the rest.” These “bubbles” are undeniable, and there are notable differences between these groups. For example, the Defence Procurement Strategy, introduced to approach the procurement process holistically while keeping in mind benefits for Canadians and the government’s Agenda commitments, has fundamentally changed the work reality for DND and PSPC PGs while having little to no effect on PGs outside of those two big departments. Despite this, a commitment to a PG community would introduce positive government-wide changes such as a culture of mutual support and collaboration that would permeate all three PG groups.
CURRENT CHALLENGES
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DEMOGRAPHICS Recent years have seen a major change in our demographics. Approximately 25 per cent of the PG community plans to retire within the next five years, with the average age of a PG being 46 years old. The procurement group is already facing major shortages, and these retirements to come will exacerbate an existing problem. However, the increasing age of the PG population is not the only explanation for the declining number of PGs employed by the federal government today. Budget freezes in past years have resulted in limited hiring; therefore, as employees retire, new employees do not replace them. The PG group has also had difficulty retaining existing employees. 28 • SUPPLYCHAINCANADA.CA • SCMA
Organizations who conduct exit interviews have noted numerous possible reasons for this, including: ■■ Inadequate compensation for the skill set required ■■ The risk inherent in the positions ■■ An unclear career path beyond the PG06 manager role ■■ Opportunities for increased compensation in other job categories ■■ The daunting complexity of the job in an environment of risk aversion ■■ Lack of recognition for the tasks performed CHANGING EXPECTATIONS The PG function is experiencing a fundamental change to its core business, moving away from a role as a rule enforcer to that of key business enabler. Routine procurement is not nearly as common now, as the demands change from predictable, repetitive purchases to complex, often extremely large and varied requirements. There is also an increased demand for soft skills, such as the ability to deliver outstanding client service, form partnerships and collaborate. Early client engagement, outstanding communication and collaboration throughout the process and innovative, tailored solutions make up the procurement function of the future. So, who is the PG of the future? With increasingly complex procurement, there is great demand for strategic thinkers capable of analyzing available options, identifying risk and proposing creative, tailored solutions. Gone are the days of a person buying the same low-dollar value commodity throughout their entire career. The expectation now is to provide innovative, strategic solutions starting at the most junior PG level. Rather than following the same basic procurement practices, the abilities needed now are: ■■ To think creatively, strategize and synthesize information ■■ To collaborate and partner ■■ To be proactive and offer innovative solutions The ideal PG wants to be a partner at the table and be seen as a value-added service, an enabler who can help the organization achieve its goals. The last thing we want to be is a rule pusher, unable to see the forest for the trees. Rules and regulations have to exist to give us boundaries and guidelines. The key is to find innovative solutions that work within these guidelines, always respecting the boundaries but pushing them where required. Jessica Sultan is director, Strategic Procurement and Material Management Division at the comptrollership branch of the Canada Border Services Agency.
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