Managing a supply chain
Here we provide information on tools to help your organisation better manage its supply chain
Managing a supply chain
Agency Compliance - If you are looking for information specifically on the compliance of a recruitment agency you can visit this page
Modern Slavery Obligations - this page gives advice specifically on organisational obligations under the Modern Slavery Act
Managing your supply chain means that you have all the tools set up to provide you with awareness in order to make valuable decisions for your suppliers and your business. ASCOR's suggested indicative tools are defined below:
A questionnaire, usually completed by the supplier prior to any supplier engagement with the business. It aims to identify the fundamental areas, such as financial viability, competence, geographical coverage, resources, qualitative accreditations (i.e. ISO), Insurance, Liabilities, important international, national, local regulation compliance (i.e. Modern Slavery Act, Equal Opportunities) etc. This can be built as per your company’s critical requirements.
An official document duly signed by both parties. The simplest form of a contract between a business and their supplier should include clear information about the framework agreement, costs and a detailed description about expectations and obligations for both parties. The contract should be followed by periodic meetings between the Customer and the Supplier to ensure compliance with the terms and conditions and provide accurate information for the Supplier Evaluation Scorecard (see below).
Every organisation should conduct due diligence to ensure that the supplier that they will work with either in the short or long term, will be risk free or, at least, have a manageable level of risk. Any risk profile should be always be communicated in advance and agreed on; the areas to be scored together with the supplier. Specific actions should be agreed with the supplier to ensure that they will mitigate any risks accordingly and achieve specific progress until elimination (where possible).
The agreement between the two parties on what exactly the supplier is expected to deliver during the period of the collaboration.
Service Level Agreement (SLA) – if applicable
A more detailed agreement about specific aspects of the framework and the contract that would need to be followed by the supplier. Usually, it has a quantitative element, like a scorecard (x/100, %, fixed score, etc) and it is helpful during periodic supplier evaluation meetings.
Supplier Evaluation Scorecard
A scorecard captures the areas that the business and the supplier have agreed from the beginning that are important to be measured. The scorecard would need to reflect the pragmatic picture of the supplier and would always need to be supported by facts in order to ensure objectivity, transparency, and collaboration for improvement and development.
Supply chain compliance
Supply Chains, from the simplest to the most complicated form are exposed to a continuous and rapidly developed global environment, where following the law seems to be not enough to serve their purpose.
If you are concerned about compliance within your supply chain, get in touch with ASCOR via the Contact Us page. Intelligence from hiring organisations is important to help improve the overall standards in labour supply chains.
To feel confident about your supply chain, you need to build awareness around compliance, and compliance in the supply chain needs to be an functional business concern. Some of the steps below can help to support this goal:
Procurement & Risk expertise: Use your procurement and risk teams specialism (where applicable) to support you with the due diligence. They are the ones that, usually, would be aware of the latest information.
Your Values: Try to understand what your stakeholders expect, what are your values as a business, and ask your supplier to comply with these, even if they are not legal requirements. For example, the Modern Slavery Act, as a law, requires businesses with a certain level of annual turnover and above, to comply and to issue a public statement about their current and future actions. Nonetheless, even if your suppliers are well below this turnover threshold, it would be ethical to ask them to provide a statement declaring that they do not support modern slavery practices in their business or supply chains. You can find more information on your Modern Slavery obligations here.
Vigilance: Be vigilant in the selection of your suppliers. Ensure that there is a specific policy within your organisation regarding procurement, that is periodically reviewed and adjusted to new regulations and social expectations.
Accurate data collection: Make sure that all the information you collect from the tools on our Managing a Supply Chain page (here) is accurate. This is the only way that you will be able to take corrective actions and decisions.
Close relationships: Ensure that you are working very closely with your suppliers to identify and manage any potential risks.
For information specifically on what you can expect an Employment Agency to do to provide compliant labour supply, please click here.
Modern slavery obligations
Modern Slavery Act 2015
The Modern Slavery Act 2015 requires certain commercial organisations to publish an annual statement setting out the steps they take to prevent modern slavery in their business and supply chains, this requirement comes under Section 54 (Transparency in Supply Chains).
These organisations are those that supply goods or services and have a turnover of not less than an amount prescribed by regulations made by the Secretary of State.
The legal requirements are listed below. Further information, including links to tools and resources to support effective activity and reporting, can be found here. It is imperative that an organisation's:
Modern Slavery Statement is updated annually.
Modern Slavery Statement is published on the organisation’s UK website.
Modern Slavery Statement clearly states that it has been signed off by a Director and has Board approval (or equivalent).
What should an organisation include in its Modern Slavery Statement?
Organisations are not expected to guarantee that all of their supply chains are ‘slavery free.’ Nonetheless, statements must describe the main actions the organisation has taken during the financial year to deal with modern slavery risks in its supply chains and its own business. If the organisation has taken no steps to deal with modern slavery risks, it must still publish a statement stating this to be the case.
The Home Office’s statutory guidance recommends that the statement covers the following 6 areas:
organisation structure and supply chains.
policies in relation to slavery and human trafficking.
due diligence processes.
risk assessment and management.
key performance indicators to measure effectiveness of steps being taken.
training on modern slavery and trafficking.
The detail and quality of information included under each of the 6 areas should improve in successive annual statements.
For more help with structuring a statement, deciding what information to include and planning how to make progress in future statements, read the Ethical Trading Initiative’s Modern Slavery Statements Evaluation Framework.