In the last 30 years, the function of a supply chain has changed dramatically with a monumental shift to global sourcing, in order to reduce input costs. As a result, global firms now outsource manufacturing
and source materials from developing countries.

50%

of companies are unable to determine
the sustainability issues in their supply chains

The Sustainability Consortium, 2016

Only 25%

of firms have sustainability programs
in place to respond to regulatory requirements

McKinsey survey, 2011

 

Companies tend to focus on their top-tier suppliers,
but
the real risks come lower down.

Harvard Business Review, 2020

 

+40 million people enslaved  worldwide generating $150 billion of illegal profits 

International Labour Organisation, 2014

 

Supply chain sustainability top business drivers

1  Improve operational efficiency and lower costs 

2  Build, maintain, or improve corporate reputation

3    Align with business goal, mission or values

4    New growth opportunities

McKinsey survey, 2011

Only 6%

of companies are
ranking sustainability
as one of their top 3
business drivers for SRM

State of Flux research, 2018

 

A focus on modern slavery risks

Modern slavery and the seafood industry

Thailand is the world’s top exporter of tuna, and one of the biggest exporters of all fish. Its marine fishing industry is particularly prone to modern slavery due to its size, lack of regulation, extent of illegal operations, and exploitation of migrant workers.

There are more than 50,000 fishing vessels and about 500,000 workers in the industry. Investigations by groups including Greenpeace and the International Labour Organisation suggest the majority of those working on boats meet the definition of modern slavery – any situation where a person is forced to work under threat; is owned or controlled by their employer; dehumanised or treated as a commodity; and is not free to leave.

Are there any slaves in your supply chain? Contact Kate Skattang


Buoyancy film - Interview

Kate Skattang, Managing Director, Australia and New Zealand
at State of Flux

Modern slavery legislation: what are my obligations?

Australian Modern Slavery Act  


The Modern Slavery Act 2018 was introduced by the Australian government to increase organisations’ accountability of their supply chains due to growing concern on human right violations and abusive labour practices. The act requires entities with consolidated revenue of over AUD$100 million to draft modern slavery statements, which must include:

  • The risks of modern slavery in the supply chains of reporting entities and their subsidiaries.
  • Actions taken to address those risks and be approved by the board of directors.

The business needs to ensure that it has carried out appropriate due diligence on its supply chains to identify and map direct, tier 2 and 3 suppliers and beyond, and identify country of origin in order to identify risk.

UK Modern Slavery Act  


The Modern Slavery Act came into force in 2015 and requires organisations with a turnover exceeding £36 million, or over, to ensure that their business, and the supply chains used by the business, are free from modern slavery. The Act requires businesses to:

  • Include an annual "modern slavery statement" in each annual report.
  • A link to the statement must also be included on the website of the business.
The business needs to ensure that it has carried out appropriate due diligence on its supply chains to enable the statement to accurately reflect risk and identify appropriate mitigation strategies.

Need help with your modern slavery approach?

Contact us

How we can help 

Identify high risk suppliers in your supply chain

Traditionally procurement organisations have focused on their direct suppliers in terms of managing risk, continuity of supply and quality, however with the introduction of new legislation require organisations to think in terms of their entire supply chain, not just their key tier one suppliers. This is a shift in thinking that contemporary procurement practices and systems are not geared for. As such, procurement, compliance and sustainability teams are all grappling with the issue of how to gain visibility of their supply chain beyond their direct suppliers and how to ensure sustainable practices further down the chain.

The modern slavery and supply chain sustainability roadmap


 Sustainability_Modern_Slavery_Risks_SOF-2

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Supplier risk management technology

SupplierBase

Find out more

State of Flux' SupplierBase platform is designed to facilitate the onboarding and management of suppliers, to maximise value and reduce risk.  SupplierBase helps assess and monitor third party  risk through automated workflows, track risks against defined metrics and implement and track action plans. 

The platform will increase your ability to manage a large number of suppliers within a complex supplier chain, and integrates with third party risk information providers to monitor supply chain, regulatory and cyber risks.


Now live! State of Flux 2020 global research
Supplier management at speed

This is the 12th consecutive year of conducting global research; it's never been more important to understand how supplier management is helping mitigate current supply chain challenges. Over this time we've had more than 2,000 organisations participate and collected over 2 million data points. The survey is open until Friday 29th May.

Upon completion of the survey request a free benchmark and analysis of your responses so you can understand how good your supplier management processes are against your industry peers.

Complete survey

 

Launch2020-Survey-Supplier_Management_at_risk


About State of Flux


Headquartered in London, with offices in the United Kingdom, United States and Australia, State of Flux has been supporting clients in procurement for over 15 years
.

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