Ethics in SCM
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This document discusses business ethics and ethical practices across various functions like procurement, manufacturing, marketing, and supply chain management. It addresses establishing ethical codes and compliance, managing suppliers' ethical conduct, and addressing common ethical issues. The key topics covered are the importance of ethics in business decisions, establishing ethical practices in areas like procurement, manufacturing and marketing, managing suppliers' integrity, and the role of compliance officers in addressing ethics-related risks from suppliers.
Ethics in SCM
- 1. Swatanu Mohan Satpathy Roll – 108 PGDM2010-12
- 2. Business ethics Ethical issues Ethical practices – Procurement, Manufacturing, Marketing Ethical code Ethical issues in SCM Supplier Ethics Management December 1, 2011 2
- 3. “The study and examination of moral and social responsibility in relation to business practices and decision making in a business” Dictionary.com Not limited to company alone But involves Suppliers Manufacturers Marketing and distribution Customer care December 1, 2011 3
- 4. Truthfulness in marketing – Advertisements Use of animals in product testing – Cosmetics Research Agricultural practices – Intensive Farming Honesty in information providing – Enron Degree of safety – Nokia BL 5C battery Donations – CSR Labour issues – Child labour December 1, 2011 4
- 5. Procurement Conduct manifestation of organization culture Selection of Suppliers no personal bias Supplier’s Practice understanding supplier’s supply chain December 1, 2011 5
- 6. How to establish ethical procurement practices? Purchasing code of conduct Integrate ethical purchasing to existing management Rewards and performance reviews Top management support in establishing ethical code Business environment and culture of source country Training to employees and staff Proper communication to all levels Ethical audits – surprise visits to factories, warehouses December 1, 2011 6
- 7. Societal - Public - Employees Environmental - Animals - Mother earth December 1, 2011 7
- 8. How to establish ethical manufacturing practices? Labour Health and Safety - EHS* standards Abuse and Discrimination - transparency Freedom of Association Environmental Impact Monitoring Clear communication, no cheating Quality Confidentiality *EHS – Environment, Health, Safety (EPA etc.) December 1, 2011 8
- 9. Issues Price-war against competition Misleading advertisements Piracy Ambush marketing Compromise safety Compromise quality December 1, 2011 9
- 10. How to establish ethical marketing practices? Sales manager – assigning roles without bias Sales associates – accountability Proper labels and warnings on products Clarity in information Quality Assurance testing December 1, 2011 10
- 11. Principles governing morality and acceptable behaviour - Personal behaviour - Corporate behaviour Ethical code in terms of Relations with stakeholders Environment and Society International Business Mergers and Acquisitions Governance December 1, 2011 11
- 12. Ethical codes and compliance Limitations of Ethical audits Commercial vs. ethical agendas Governance – large no. of suppliers December 1, 2011 12
- 13. Management of suppliers Align supplier’s business conduct with purchaser’s standards Reduce “ corporate integrity failure ” Scandal arising because of supplier’s fault is tough to handle as you are not at fault but have to face the music. December 1, 2011 13
- 14. Supplier Integrity Corporate Compliance Ethics Responsibility Laws Internal External Regulations values values www.corporatecompliance.org December 1, 2011 14
- 15. Ethics & compliance officers advice to Procurement Make ethics & compliance a factor in supplier selection. Target and segment suppliers by importance and ethics risk. Create and maintain compliance profiles of targeted suppliers. Assign E&C personnel to major supply-relationships. Conduct regular assessments of supplier ethics. December 1, 2011 15
- 16. December 1, 2011 16
Editor's Notes
- #5: Agricultural practices – intensive farming- heavy use of fertilizers n inorganic chemicalsMatsushita dec05-nov 06
- #9: Labor includes child labor, forced labor and labor compensation
- #12: Conduct ethical audits
- #14: Supplier Ethics Management is the management of suppliers and supply relationships with strategies, programs, and metrics that better align supplier business conduct with purchaser standards, with the goal of reducing the purchaser's overall risk of corporate integrity failure in the supply chain."Corporate integrity failure" embraces any enterprise-level scandal involving aviolation of Compliance,ethics, or corporate responsibility standards.
- #15: Supplier Ethics Management is the management of suppliers and supply relationships with strategies, programs, and metrics that better align supplier business conduct with purchaser standards, with the goal of reducing the purchaser's overall risk of corporate integrity failure in the supply chain."Corporate integrity failure" embraces any enterprise-level scandal involving aviolation of Compliance,ethics, or corporate responsibility standards.