CPSM Blog

Supply chain safety policy and procedures

The supply manager is expected to not only implement and monitor safety in the supply chain but also promote and advocate safety.

Not only US safety laws like OSHA are important but other countries legislation must be complied with like European Union Restriction of Hazardous Substance Directive (RoHS) , the Waste Electrical and Electronic Equipment Directive (WEEE) and Registration.Evaluation and Authorization of Chemicals Directive (REACH).

Finally, homeland security must be considered when dealing with supply chain safety issues.

Environmental responsibility, CERCLA and an EMS

Environment responsibility from "cradle to grave" of materials purchased is the responsibility of the supply manager. The CERCLA ( pronounced Sir-kla and an acronym for Comprehensive Environmental Response,Compensation and Liability Act ) is the principal guiding legislation in this regard.

Supply managers need to explicitly consider any creation,transport,disposal of any toxic waste or by-product that may be produced across the supply chain. Proper records and an explicit addressing of issues are mandatory. Importantly, even when say suppliers are hired to dispose off toxic materials and these suppliers make mistakes, the supply manager's organization will be responsible and  liable for consequential damages under CERCLA although the disposal contractor was in default. An environmental management system (EMS) that operates under a systematic quality procedure like ISO 14000 and is therefore audit-able  and amenable to systematic improvement is very desirable.

Code of business conduct for supply management and external suppliers

Social Responsibility starts with a code of conduct for both supply management and and supplies. Guiding principles are based on the current ISM Principles and Standards of Ethical Supply Management  Conduct (Global) approved in 2005.

International issues are guided by the United Nations "The Ten Principles of the Global Compact."

The Foreign Corrupt Practices Act (FCPA) 1977 and revised 1988 prohibits offering a bribe to a foreign official or NGO for an order. In addition, hiring a relative of a foreign official with the intent of influencing decisions is illegal. Intriguingly, "grease payments" like $5 for moving your file forward because the test that there will be an order is not provable. At most things move faster (probably) because of "grease payments" but there is no guarantee of order. However for supply managers such actions might indicate an appearance of impropriety and therefore should be avoided.

Finally, the Sarbanes Oxley ACt (SOX)  in the US  involves not only adoption of codes of ethics but also evidence that employees have received explicit training on codes of ethics.