Unit 6: Responsible Tourism Supply Chains


Published on

Published in: Travel, Technology, Business
  • Be the first to comment

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

Unit 6: Responsible Tourism Supply Chains

  1. 1. UNIT 6. RESPONSIBLE TOURISM SUPPLY CHAINS Picture source: http://images.danviet.vn/CMSImage/Resources/Uploaded/baogiay2/261_11_thu-hoach-ca-chua.jpg
  2. 2. Unit outline Objectives By the end of the unit participants will be able to: • Understand the mechanics of supply chains and the importance of building sustainability in the supply chain • Develop a sustainable supply chain policy and action plan • Implement a supply chain sustainability assessment • Identify strategies to support suppliers to meet supply chain sustainability goals • Understand how to monitor the sustainability performance of the supply chain and support continuous improvement Topics 1. Introduction to responsible tourism supply chains 2. Sustainable supply chain policy development and action planning 3. Raising awareness and supporting suppliers to meet sustainability targets 4. Monitoring and evaluate sustainability performance
  4. 4. What is a supply chain? • The system of moving of a product or service from supplier to customer • Results in natural resources, raw materials, and components being transformed into a finished product • Tourism supply chains involve core and ancillary tourism goods and services • The final product purchased in a general tourism supply chain is the holiday Picture sources: vov.vn/Uploaded/VietHoa/2012_11_21/Bieu%20dien%20van%20nghe.jpg http://sinhcafe.com/photo_north/Maichau/maichau_hoabinh_trekking_adventuretoursdotvn.jpg http:// www.schoolanduniversity.com/images/page_uploads/Food-and-beverage-Management.jpg http://upload.wikimedia.org/wikipedia/commons/9/97/Premier_Executive_Transport_Services_Boeing_737-700_KvW.jpg http://www.relaxitsdone.co.nz/_media/images/257-luxury-accommodation-in-queenstown-at-45-south-luxurious-master-bedroom.jpg
  5. 5. © 2003 Richard Tapper, Environment Business & Development Group The key actors in tourism supply chains
  6. 6. Picture source: http://piboonrungroj.files.wordpress.com/2011/07/slide03.jpg The tourism sector supply chain
  7. 7. Two compelling reasons why we need sustainable supply chains in tourism Consumers expect it You are eroding your core product
  8. 8. Some other good reasons to develop a sustainable supply chain • Improved profile / brand • Improved market access • Increased operational effectiveness • Increased sustainability
  9. 9. Some common sustainability issues in tourism supply chains ECONOMIC PERFORMANCE ISSUES Employee wages and benefits Local purchasing Revenue leakage Linkages with local suppliers and subcontractors Corporate responsibility-related payments SOCIO-CULTURAL PERFORMANCE ISSUES General Equal opportunities and non-discrimination Human rights (including combatting sexual exploitation of children) Workplace Workplace conditions Labour relations (fair wages, job security, working hours etc) Health and safety Training and education Children in the workplace Suppliers and subcontractors Labour relations and human rights practices Contracting with small and micro-enterprises Respect for rights of ethnic and minorities and of local communities Community Traditional rights and freedoms Local consultation and participatory decision-making Contribution to community development Economic linkages with local communities ENVIRONMENTAL PERFORMANCE ISSUES Energy use Water use Waste management Wastewater management Contributions to biodiversity and nature conservation Chemical use Emissions (CO2, ozone depleting substances) Land conversion Air, water and land pollution Toxicity of materials and products used Purchasing guidelines Built environment (including protection of architectural, historical and archaeological heritage) Environmental management system Source: Tour Operators’ Initiative for Sustainable Development (TOI) 2004, Supply Chain Engagement for Tour Operators: Three Steps Toward Sustainability, TOI, France
  10. 10. 93% of your supply chain is invisible – and why this matters to you! • Most supply chains today are so complex that companies don’t know exactly what’s happening in them • Poor practices in the supply chain can result in serious risk and reputation issues, legislation and litigation issues and lawsuits for false claims relating to human and environmental issues • The impacts of poor practices by others can and will eventually affect you Source: Rowe A. 2013, ‘93% of Your Supply Chain Is “Invisible”’, Network for Business Sustainability, Available [online]: http://nbs.net/knowledge/93-of-your-supply-chain-is-invisible/, Accessed: 09/02/2014
  11. 11. The function of making tourism supply chains more sustainable • Recognises sustainability goes beyond the company • Uses the power of policies and contracts combined with b2b support to create positive change • Requires working with suppliers to achieve positive financial and sustainability performance • Is grounded in the principles of responsible tourism Healthy communities Natural environment Economic vitality SUSTAINABLE TOURISM
  12. 12. Example: Putting responsibility into a component of a tour operator’s supply chain TOUROPERATOR Hotel Restaurant Dairy suppliers Fruit & vegetable suppliers Canned goods suppliers Others Attractions Others Tour operator • Uses local destination guides • Employs local staff • Recycles • Informs guests of sustainability issues • … Restaurant • Employs local staff • Sources sustainable food • Implements Fair Trade • Supports local sustainability projects • Pays fair salaries • … Suppliers • Grow food organically • Do not sell endangered animals • Have good working conditions • …
  13. 13. Example of simple restaurant supply chain Picture sources: http://www.hoianworldheritage.org.vn/uploads/news/rautraque.gif; http:// www.vinacorp.vn/Content/ckfinder/userfiles/images/bia(1).jpg; http://images.vietpress.vn/Images/Uploaded/Share/2013/09/23/93.jpg; http://www.vinachem.com.vn/TCTYHC/GifAdv/Ninh_binh/san_pham.gif; http://newworldvn.vn/hinh-anh/images/the gioi-moi/ao-ghe-nha-hang-khach-san.jpg; http://www.stevina.vn/uploadfiles/product/C%C3%A2y%20gi%E1%BB%91ng%202.JPG; http://dantri4.vcmedia.vn/2togCcWP25hx4bn5VbuB/Image/2013/11/anh-minh-hoa-cdac7.jpg; http://www.dunghangviet.vn/uploads/content/2012/04/05/thanh-loc-rau-qua-truoc-khi-xuat-khau- 0386.jpg; http://eventsnpromotions.com/wp-content/uploads/2012/12/photodune-1735309-waiter-with-champagne-xs.jpg; http://dantri21.vcmedia.vn/Ic3EyFHpPWFvMJOJFocc/Image/2013/03/Rau-cu-qua-luoc634814061593253822-6bfaf.jpg; http://www.vanderree- transport.nl/Afbeeldingen/Wallpapers/ Van%20der%20Ree%20Transport%20(1).jpg; http://images.theage.com.au/2012/10/22/3733553/aw-Machi-20Japanese-20Resturant_20121022110825341796-360x0.jpg Fruit & vegetables ingredients Meat ingredients Table linen Beverages Restaurant Dairy farm Market Freight Fruit & veg farm Seeds Fertiliser, pesticides, etc Freight ButcherDeli or market Seeds Fertiliser, pesticides, etc Freight Cotton farm Linen store Processing factory Processing factory Fertiliser,feed, etc Retailers, Distributors, Manufacturers, Producers RESTAURANT / CONSUMER RETAILER DISTRIBUTOR, MANUFACTURER, PRODUCER Direct suppliers Indirect suppliers
  15. 15. The importance of having a sustainable supply chain policy in tourism SUSTAINABLE SUPPLY CHAIN POLICY Defines company sustainability position • Establishes the goals / targets for supply chain and supplier sustainability Prioritises issues • Identifies the specific areas of sustainability action that are most important Ensures correct action • Combined with procedures policies make sure sustainability actions are effective and do not erode sustainability goals Defines training requirements • They help identify skill and technology gaps and areas in which capacity building in sustainability topics can be implemented
  16. 16. The benefits of having sustainable supply chain policy in tourism • Helps defend a company from legal disputes  • Demonstrates company commitment to sustainability  • Promotes support of suppliers to achieve sustainability objectives • Create greater stability and consistency in supplier sustainability actions resulting in the faster achievement of sustainability objectives
  17. 17. TOPIC 2 TOPIC 3 TOPIC 4 The key steps to developing a sustainable supply chain Understand where you are Conduct a baseline study to understand the sustainability of your existing supply chain Decide where you want to be Develop a sustainable supply chain policy, standards, targets and action plan Help your suppliers get there Raise awareness, build capacity and offer rewards to help your suppliers meet the sustainability goals Monitor performance and improve Monitor, evaluate and improve performance of suppliers in meeting sustainability targets
  18. 18. Conducting a sustainable supply chain baseline study What is it? The process of researching the current level of sustainability of suppliers with the goal of identifying sustainability gaps and developing sustainability targets for improved performance Benefits  Helps find sustainability gaps  Determines the extent and type of current behaviour/practices in sustainability  Determines attitudes towards sustainability  Determines current indicator levels (before intervention)  Assists establish and prioritise sustainability policy areas/ objectives  Provides a means to set realistic sustainability targets and measure progress
  19. 19. The key steps in implementing a baseline study A. Build a management team B. Develop baseline assessment methodology and approach C. Develop assessment criteria D. Implement baseline study, review and evaluate results
  20. 20. A. Building an effective management team • Representation: Involve representatives from different internal departments and suppliers • Knowledge and experience: Ensure participants have good knowledge of key operational areas and experience or understanding of sustainable tourism • Organisation: Appoint a “policy sponsor” or “leader” for overall responsibility / ownership in developing and managing the policy
  21. 21. Source: Tour Operators’ Initiative for Sustainable Development (TOI) 2004, Supply Chain Engagement for Tour Operators: Three Steps Toward Sustainability, TOI, France •Provide resources and top- level support for the program Company Board •Use sustainability performance as a factor in selecting suppliers •Incorporate sustainability clauses into contracts with suppliers Contracting director & Managers •Discuss sustainability issues and the company program as part of regular contacts with suppliers •Provide feedback and continuous follow-up with suppliers •Facilitate dissemination of policy and training and awareness materials •Identify new local suppliers entering the tourism sector Destination Managers & Representatives •Incorporate sustainable action plans into job description and staff appraisals Human Resources Director & Department •Provide legal advice on wording, inclusion and enforcement of sustainability clauses in suppliers’ contracts Legal Advisers •Develop marketing plan to reflect company’s sustainable supply chain strategy •Provide incentives to sustainable suppliers with additional promotions Marketing Director & Department •Examine the cost implications of the sustainability- induced changes required in the supply chain and their impact on prices Production Department •Monitor quality and health and safety standard of suppliers •Incorporate sustainability performance issues into monitoring of suppliers Quality & Safety Department •Provide day-to-day management and coordination of the program •Offer advice on sustainability issues, technical supports, etc… Sustainability Unit •Provide assistance in development of training programs for staff and suppliers on sustainability issues Communications/ Training Unit Role of key departments in sustainable supply chain policy development
  22. 22. B. Developing a baseline assessment methodology and approach • What information is required? • Who will collect it? • How will we collect it? • When will be collected? • Are there any issues will affect progress? Supplier documents & data Picture source: http://sisnwinc.com/wp-content/uploads/2013/05/documents12001.jpg
  23. 23. C. Establishing sustainability criteria • Define conditions or measures for evaluating sustainability • Cover environmental, social, and economic aspects • Gauge suppliers’ level of awareness of sustainable tourism • Determine supplier desire and capabilities to implement sustainable tourism principles and practices • Identify potential barriers to the implementation of good practices
  24. 24. Examples of economic sustainability assessment criteria for suppliers  Supplier pays above minimum wages  Supplier implements strategies to avoid revenue leakages from local economy  Supplier has policies on the purchase of local products and services  Supplier pays / charges fair prices to producers  Supplier economic sustainability assessment criteria
  25. 25. Examples of environmental sustainability assessment criteria for suppliers  Supplier implements strategies to reduce waste  Supplier implements strategies to recycle products  Supplier implements strategies implements strategies to educate visitors and staff on importance of natural environment and sustainability issues  Supplier environmental sustainability assessment criteria
  26. 26. Examples of social sustainability assessment criteria for suppliers  Supplier has contracts for all workers  Supplier adheres to health and safety guidelines  Supplier implements ongoing workplace training programme  Supplier provides visitor codes of conduct to guests  Supplier social sustainability assessment criteria
  27. 27. Using Green Lotus criteria to create a supplier sustainability checklist SUSTAINABILITY CRITERIA EXISTS IMPLEMENTATION LEVEL (1 low -10 high) A Sustainable A1.4 Availability of annual plan on implementation of social and cultural activities (both inside and outside of the tourist accommodation establishment)  10 A2.2 The staff are trained on cultural and social issues (once a year)  6 B Maximise socio-economic benefits for local society B2.1 Availability of policies on recruiting local people, people from remote regions and less developed economic regions  0 B3.1 Priority in usage of locally made products or local raw materials without exhausting natural resources  0 B5.2 Availability of policies to support female employees (maternity, training, consultation on reproductive health, etc.)  3 C Minimization of adverse impacts on cultural and natural heritage C2.1 Expression of local culture and traditions in the tourist accommodation establishment’s architecture, activities and services it provides  4
  28. 28. D. Implementing baseline study, reviewing and evaluating results 1. Implement the baseline study according to plan and evaluation criteria 2. Analyse results to understand: – Areas where suppliers are performing sustainably – Areas where improvements can be made – Which companies show most interest in improving sustainable – Level of companies’ capacity to improve sustainability – Opportunities to improve sustainability performance in companies 3. Prioritise suppliers to work with on achieving greater sustainability
  29. 29. Developing a responsible supply chain policy and procedures • Sustainability standards / criteria for selecting new suppliers • Sustainability performance standards for existing suppliers to improve sustainability • Promotional opportunities and incentives • Instructions for the monitoring, reviewing and reporting on progress made on improving sustainability in the supply chain
  30. 30. Effective policies and procedures… • Set the vision  • Reflect current performance • Meet government requirements  • Identify performance areas  • Offer flexibility  • Are mutually agreed upon
  31. 31. Example of responsible supply chain policy statement A1 Tours recognises that our social, economic and environmental impacts reside as much in our supply chain as in our own activities. In our supply chain A1 Tours will ensure that our suppliers are: • Aware of the specific environmental, social and economic issues, risks and opportunities relevant to their operations and products • Ensure they operate to internationally recognised standards of practice • Ensure systems implemented deliver effective performance management and improvement A1 Tours Responsible Supply Chain Policy Statement
  32. 32. Example of responsible supply chain procedures In order to develop a sustainable supply chain, A1 Tours will: 1. Take a leadership role in sustainable supply chain management 2. Screen suppliers for their performance in social, economic and environmental issues management 3. Support suppliers to improve sustainability performance 4. Set minimum performance standards 5. Consult with stakeholders 6. Monitor compliance to agreements 7. Terminate business relationships if performance remains below standard or suppliers are unable or unwilling to work towards performance targets A1 Tours Responsible Supply Chain Procedures
  33. 33. Other provisions that can support a sustainable supply chain policy COMPANY PROCUREMENT POLICY • Internal policy specific to how company staff contract suppliers (“services”) • Can also include purchase of “goods” • Can include sustainability selection criteria for procurement of goods and services as a part of other broader requirements SUPPLIER (“VENDOR”) CODE OF CONDUCT • Specific for contracted suppliers • Should set out social, economic and environmental expectations of suppliers • Typically voluntary COMPANY SUSTAINABLE SUPPLY CHAIN POLICY INTERNAL EXTERNAL supported by For ensuring sustainable suppliers are selected For ensuring suppliers act sustainably supported by
  34. 34. The InterContinental Hotel Group’s vendor code of conduct Source: http://www.ihgplc.com/index.asp?pageid=920
  35. 35. Setting sustainability standards and targets for the supply chain • Standards provide specific requirements for the achievement of a desired action • Targets are based on the standards and enable benchmarking and the measurement of success • Standards and targets help identify where improvements need to be made • In a sustainable supply chain standards and targets should be set based upon the 3 pillars of sustainable tourism (economic, environmental and social sustainability) and address the key sustainability issues (identified in Topic 1) General principles of good sustainability standards and targets • Standards may be either performance- based, process-based, or both • Targets should be high but achievable • Standards should be flexible • Targets should be SMART (Specific, Measurable, Achievable, Realistic and Time-specific)
  36. 36. Broader supply chain targets vs. Individual supplier targets Individual supplier standards & targets The level of improvement for individual suppliers in key areas Broader supply chain standards & targets The overall number or percentage of suppliers that are to meet the given standards in a period of time Supplier A Supplier D Supplier FSupplier E Supplier B Supplier C HOTEL, TOUR OPERATOR, RESTAURANT ETC SUPPLY CHAIN Individual supplier standards & targets The level of improvement for individual suppliers in key areas
  37. 37. Example of supplier target compared to a supply chain target YEAR 1 50% of all suppliers have a formal employment contracts and position descriptions for all their staff YEAR 2 100% of suppliers have formal employment contracts and position descriptions for all their staff SUPPLY CHAIN TARGETS SUPPLIER TARGET All employees within the organisation have a formal employment contract and position descriptions within 2 years
  38. 38. Influences on the setting and achievement of sustainability targets INFLUENCES AFFECTING SETTING & ACHIEVEMENT OF TARGETS SUPPLY CHAIN SUSTAINABILITY TARGET Type, severity and source of sustainability impact Available sustainability standards for each impact Supplier’s capacity Organisation’s ability to influence the supplier
  39. 39. Examples of broad supply chain sustainability standards and targets SUSTAINABILITY STANDARD (CRITERIA) SHORT TERM (1 YEAR) MEDIUM TERM (3 YEARS) LONG TERM (5 YEARS) ECONOMIC Suppliers pay above minimum wages 10% 50% 100% Suppliers have policies on the purchase of local products and services 30% 100% Suppliers implement ongoing staff development training programme 5% 15% 70% … … … … ENVIRONMENTAL Suppliers implement strategies for responsible use of electricity 10% 30% 80% Suppliers implement strategies for responsible use of water 10% 30% 80% Suppliers implement strategies to reduce waste 30% 50% 100% Suppliers implement strategies to recycle products Suppliers promote visitor codes of conduct for interacting in the destination 25% 50% 100% … … … … SOCIAL Suppliers have policy on equal opportunity and gender equality 20% 60% 100% Suppliers have formal employment contracts covering all staff 30% 50% 80% Suppliers implement health and safety guidelines 25% 50% 100% … … … … WHOLE SUPPLY CHAIN TARGET
  40. 40. Sustainable supply chain action planning • Sets out the activities and resources required to support suppliers to meet sustainability standards and targets • Requirements: – Participation and agreement – Understanding of standards – Adequate resources including knowledge and skills
  41. 41. The TOI’s tips for effective sustainable supply chain action planning Involve suppliers incrementally Plan for different rates of supplier progress Focus on continuous improvements Work with other partners in the same destination Source: Tour Operators’ Initiative for Sustainable Development (TOI) 2004, Supply Chain Engagement for Tour Operators: Three Steps Toward Sustainability, TOI, France
  42. 42. Example of responsible supply chain action plan Environmental Action / Initiative Responsibility Start date Finish date Status/ Date achieved Conduct sustainability audits of suppliers giving priority to more accessible suppliers John Smith Oct 2013 Jan 2014 Underway Assist hotel suppliers conduct waste quick scans Mary Munroe Feb 2014 Aug 2014 Not started Develop a supplier code of conduct and procurement policy to support the sustainable supply chain policy Peter Pan Jan 2013 Feb 2013 Completed Implement a sustainable supply chain training programme for key suppliers Greg Matthews Apr 2013 Aug 2013 Completed …  In progress/achieved  In progress / risk of not being achieved  Not achieved
  43. 43. Contracting or amending supplier contracts • Cannot fully achieve a sustainable supply chain without including sustainability issues into contracts and altering procurement practices • Good sustainable supplier contracts: – Are gradually introduced after a period of voluntary improvement – Clearly highlight the importance of sustainability to the supplier – Establish minimum performance standards and optional criteria – Are supported by performance checks
  44. 44. Key steps in developing a sustainable contracting system • Develop approach and procedures for implementation of sustainability performance as a contracting criteria • Draft contractual clauses for minimum performance requirements • Establish procedures for supplier non-compliance  • Appoint a staff member to manage sustainable supply chain activities
  46. 46. The importance of awareness and support in developing sustainable supply chains •Develop sustainability messages •Communicate sustainability messages to suppliers Raising awareness creates understanding, participation and commitment •Provide training, information, networks, assistance •Offer incentives and rewards Providing support promotes action
  47. 47. Developing awareness raising messages on sustainability SUSTAINABILITY MESSAGES Reflect baseline study results Select appropriate dissemination channels Establish partnerships Keep messages simple Inform about overall programme
  48. 48. Communicating messages about broad sustainability issues Match communication methods to characteristics of suppliers Prioritise personal communication Keep communication constant with regular updates Encourage feedback Monitor responses and support continuous improvement     
  49. 49. Awareness raising channels relevant to developing a sustainable tourism supply chain Meetings and workshops Gather relevant suppliers together to communicate about the sustainability supply chain programme and new or amended policies. Newsletters, brochures & flyers Inform suppliers and others about the new or amended policy through your organisation’s print promotional material such as newsletters, flyers and brochures. It’s also good for your customers to read. Website Create a section on sustainability in the company website to communicate responsible tourism policies and actions. Great for suppliers and customers. Email Deliver information about the sustainability program directly to the mailbox of the supplier. Coming from senior management can add a level of authority. Quick and direct. Picture sources: Pixabay, http://pixabay.com/
  50. 50. Principles of effective awareness messages grab HEART HEAD CALL TO ACTION! Be consistent communicate BENEFITS
  51. 51. Communicating the new sustainable supply chain policy: Key information to deliver Sustainability policy / Code of Conduct etc •The original policy / procedures / code etc in full Background •Explanation of comprehensive development process adopted Purpose •Importance about why the sustainability programme is needed Affected stakeholders •Indication about who the Policy, Code etc affects Benefits & incentives •What the direct and indirect benefits of adoption will be Implementation plan •What the company will do next to instigate the sustainability programme Further information •Where to obtain further information (or from who) and how
  52. 52. Providing support to meet sustainable supply chain goals • The process of businesses helping businesses is often referred to as b2b (“business to business”) exchange • b2b exchange refers to the dialogue and actions that take place between companies to create mutual benefits and gains • b2b exchange is a good way to foster sustainability improvements in tourism supply chains because: – You have an intimate understanding of your consumers – You have access to technology and information – By helping your suppliers you are helping yourself ORGANISATION SUPPLIER Awareness raising Capacity building Incentives Improved & more sustainable goods & services B2B EXCHANGE Picture sources: Pixabay, http://pixabay.com/
  53. 53. Supporting tourism suppliers through capacity building CAPACITY BUILDING OPTIONS Training Informati on resource s Mentori ng Fam trips Network s
  54. 54. The TOI’s recommendations on incentives for suppliers to meet sustainability goals • Suppliers need to be convinced of the advantages of taking sustainability measures • Recognition and rewards help foster positive action • Develop a “preferred supplier” scheme for suppliers that meet sustainability goals which offers benefits such as:  Higher rates  Longer-term contracts  Committed guarantees  Joint marketing agreements  More brochure space  Joint promotional activities  Favoured status in system sales searches Source: Tour Operators’ Initiative for Sustainable Development (TOI) 2004, Supply Chain Engagement for Tour Operators: Three Steps Toward Sustainability, TOI, France
  56. 56. The steps involved in a supply chain sustainability evaluation Decide what you are monitoring Let your suppliers know about the monitoring programme Evaluate and assess your suppliers’ performance Tell your suppliers how they are performing Foster continuous improvement Picture sources: Pixabay, http://pixabay.com/
  57. 57. 1. Establishing sustainability criteria for the evaluation • Review results of baseline study • Use the sustainability standards and targets that have been established ensuring the targets are: – SMART – Prioritised – Applied incrementally – Written as short statements that require either an absolute figure, a relative figure, or a simple “yes/no”
  58. 58. The 3 main types of indicators Performance • Reflect changes in outcomes • E.g. The number of employees with formal employment contracts Process • Reflect changes in commitment • E.g. The presence / absence of a minimum wage policy Perception • Reflect changes in attitude • E.g. The percentage of suppliers that believe their sustainability activities have improved community livelihoods Source: UNWTO & SNV Netherlands Development Organisation 2010, Manual on Tourism and Poverty Alleviation – Practical Steps for Destinations, UNWTO & SNV Netherlands Development Organisation, Madrid, Spain INDICATOR
  59. 59. 2. Communicating the sustainability monitoring programme and criteria • Use standard communication approaches • Ensure the message content includes: Benefits and consequences Evaluation criteria Definitions Criteria calculation methodology Implementation, roles and responsibilities
  60. 60. Example of letter communicating a sustainability supply chain programme Dear supplier, Thank you for agreeing to work with us to improve your sustainability performance. Consumers and governments alike are demanding greater sustainability and we believe that by starting now you and us will be ahead of the competition and also prepared for potential increased government regulations in the future. At a more direct level, we also believe our sustainability standards will provide immediate benefits to you in the form of improved worker performance, enhanced reputation and cost savings through greater efficiency…. In order to measure the success of the programme we need to ensure our suppliers are meeting our supply chain sustainability standards. The key sustainability criteria we shall be monitoring of our suppliers include: Our supply chain manger will contact you to review the progress quarterly, and kindly request your participation in providing evidence of performance to meet criteria such as power and water bills, action plans, policy documents… … SUSTAINABILITY CRITERIA UNIT OF MEASURE TARGET SOC Supplier has policies on the purchase of local goods and services Formally approved company policy document 1 local procurement policy developed and approved within 6 months Supplier provides employment contracts for all staff Formally approved worker contract documents 50% of workforce have employment contracts in 6 months, 100% in 1 year ENV Supplier implements strategies to reduce waste Formally approved action plan Evidence of waste management activities At least 3 activities are undertaken in 6 months; 10 activities completed in 1 year … … … Criteria Benefits Calculations Implementation, responsibilities
  61. 61. 3. Conducting the sustainability evaluation • Evaluate suppliers based on the size of the organisation and its supply chain and available resources, can be: 1. Organisation led 2. Contracted 3rd party 3. Supplier self-evaluation • Collect information from suppliers and compile into a spreadsheet table for easy analysis • Examine results to review performance for: – Individual suppliers to meet supplier targets – Combined results to meet supply chain targets ORGANISATION SUPPLIER 3RD PARTY EVALUATION METHODS
  62. 62. Example results of a supply chain sustainability assessment SUSTAINABILITY CRITERIA UNIT OF MEASURE TARGET SUPPLIER A B C D E F G H I Supplier has policies on the purchase of local goods and services Formally approved company policy document 1 local procurement policy developed and approved within 6 months Yes Yes Drafted but waiting approval Not started Not started Yes Drafted but waiting approval Yes Not started Supplier provides employment contracts for all staff Formally approved worker contract documents 100% of workforce have employment contracts in 1 year 20% 50% 90% 0% 10% 0% 30% 100% 50% Supplier implements strategies to reduce waste Evidence of waste management activities 10 initiatives completed in 1 year 4 6 6 2 4 0 6 6 4 … … … .. .. .. .. .. .. .. .. .. Individual supplier performance assessment Poor Average Good Poor Poor Poor Poor Excellent Average PROCUREMENT POLICIES NO. SUPPLIERS Approved local procurement policies 4 Draft local procurement policies 2 No local procurement policy 3 TOTAL 9 EMPLOYMENT CONTRACTS NO. SUPPLIERS 75%-100% of staff in employment contracts 2 50%-74% of staff in employment contracts 2 25%-49% of staff in employment contracts 1 0%-24% of staff in employment contracts 4 TOTAL 9 WASTE MANAGEMENT NO. SUPPLIERS >5 waste management activities 4 <5 waste management activities 4 0 waste management activities 1 TOTAL 9 Individual supplier assessment Supply chain assessment
  63. 63. 4. Providing feedback to suppliers on performance • Write a performance report for each supplier • Use a simple and easy to understand format • Highlight the positives • Provide encouragement for progress (even if target has not been achieved) • Provide a conclusion and implications for action
  64. 64. Example of presenting sustainability assessment results of a supply chain 45% 22% 33% Suppliers with local procurement policies Approved local procurement policies Draft local procurement policies No local procurement policy 22% 22% 11% 45% Suppliers with staff in formal employment contracts 75%-100% of staff in employment contracts 50%-74% of staff in employment contracts 25%-49% of staff in employment contracts 0%-24% of staff in employment contracts 45% 44% 11% Waste management initiatives in 2013 >5 waste management activities <5 waste management activities 0 waste management activities
  65. 65. 5. Ensuring continuous improvement in sustainable and responsible purchasing Keep support targeted Look forward to each assessment period Finally, provide ongoing support to suppliers to help them meet sustainability goals Finally, provide ongoing support to suppliers to help them meet sustainability goals
  66. 66. Xin trân trọng cảm ơn! Thank you!