CPSM Blog

Preventing and responding to discrimination or harassment in the supply management department

This section (3-B-8)  puts you in a Supply Management leader's role and asks you to think about issues of discrimination and harassment of co-workers. The important thing is that here you are not thinking about Supplier Diversity which is covered elsewhere in Exam 1 (1-F-3, 1-E-2, 1-D-1) and Exam 2 (2-D-3). Keep in mind that section 3-A-13 introduces the concept of diversity in the workplace but this particular segment of Exam 3 i.e. 3 B is about compliance - viz . if you are the CPO or Chief Supply Officer are you compliant with laws and rules pertaining to discrimination and harassment?

The laws can be US ones like:

1. Equal Pay Act of 1963 which asks you to ensure that for the same work using the same skills you should be paying the same. For example,  there was the class action lawsuit by women employees of Walmart followed by individual lawsuits. Could this have been prevented early on by better leadership  ?
2. Federal Civil Rights Act of 1964   particularly Title VII prevents discrimination against employees on the basis of race,religion,color,sex or national origin.
3. Executive order 11246 of 1965 prevents employment discrimination if you are a federal contractor. 
4. Age Discrimination 1967  This one is strange  because all of us will be old - one day. However, the relatively younger colleagues tend to be more technically competent and older colleagues get discriminated. Perhaps training older workers is away to prevent this kind of discrimination.
5. Equal Employment Opportunity Act (EEOA 1972)  is something you see in job ads. The purpose is to have an  employee  mix that reflects the community population mix. And the EEO Commission can directly file lawsuits against organizations that violate EEO. 
6. National Labor Relations Act or Collective Bargaining or Taft-Hartley allows individuals to organize and bargain effectively. 
7. OSHA is also featured in this section. Again the logic is are you compliant with OSHA in the supply management departmet? 
8. Americans With Disabilities Act prevents discrimination in employment for disabled candidates.
9. Although USERRA is not mentioned in the study guide it's a good idea to become familiar with the need to hire qualified veterans into supply management positions. 

Sexual harassment and diversity training are other important topics in this section. In general, you would have had your HR folks arrange training on these topics. Its a great idea to sign up- particularly for the online training in these topics. Apart from acing this section in the CPSM - you'll find that you'll learn nuances about what type of behaviors are appropriate and what are not, given the increasing complexity in this topic in the modern workplace.

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.