A popular apparel manufacturing in our region was recently confronted with the news that certain practices of one of their subcontractors were unethical. This news led to a dramatic fall in share price for the company and a threatened social media boycott.
In the analytical light of today’s social media, that’s all it takes to sink a business. Companies can no longer hide shifty business dealings or obtain material from illicit sources. While this is a good thing, it requires extensive due diligence and transparency on the part of both the company and its supplier.
To be considered ethically compliant, it is no longer enough to simply recognise your own company’s record for environmental responsibility. True accountability means also knowing your partners and their records for ethical sourcing and good business practices. Since so many end users are now acutely aware of business compliance guidelines, being affiliated with a substandard supplier can quickly damage your brand, your share price and your bottom line.
Additionally, any lack of transparency can be viewed with suspicion, with the assumption being made that there is something to hide. This applies not only to material sourcing but to all aspects of business, including hiring practices and ethical treatment of employees. Once your reputation is damaged by a poorly chosen partner, it is difficult to recover, so being informed about your suppliers is a must.
Working with a good supplier should feel like a simple extension of your business.
Communication is easy and you work as one team. Accountability is shared and expected. But it takes work and due diligence to get there. Researching your supplier’s record must be done before an issue arises. Ensure that your business partner takes ownership of their sourcing, that it is performed ethically, and that it is part of their culture and pervades their business model.
So, what are the features to look for in an ethical subcontractor?
It certainly can’t be simply top down, after-the-fact, or marketing gloss on a mission statement. For a company to be regarded as truly ethical, it has to be deeply infused, from the bottom up, part of the company DNA, and baked into the culture.
Whilst culture can change and adapt, and businesses, or even entire industries that have mis-stepped can pivot and reinvent themselves. Building a business with an ethical culture that permeates through the company from the ground up ensures that when a challenge arises that could lead to a conflict of interest or shortcut being taken, the teams within the ethically founded business instinctively know that protecting the brand values of their business and the client is more important than saving that last penny. It is this foundation that you can rely on to get the best long-term outcomes and what you should look for in your subcontract partners.
At Active EMS, our goal is to minimise the impact our day-to-day operations have on the natural environment, both directly and indirectly. We do this by fostering an understanding of business environmental issues among staff, suppliers, and customers. Beyond the usual recycling of water and waste minimization, we comply with both the spirit and the letter of relevant legislation and approved codes of practice. We promote recycling in all aspects of our work, including product design, where we design for minimal environmental impact throughout the product lifecycle. We continually search for new ways to be efficient and transparent, working with local customers and suppliers to minimise our environmental footprint.
All employees sign a code of conduct to ensure that they play their part in working towards the objectives of this policy, and are encouraged to contribute suggestions to help improve the ethical and environmental performance of Active EMS. Our management team ensures that our code of conduct is more than a mission statement – that it is instilled in everything we do.
For example, the Active EMS technical team suggested a move away from working 40 hours over 4½ days to operating 40 hours in 4 long working days a week. When this change was implemented, it reduced mileage travelled by staff members, reduced inefficiency of warming up machinery for half a day of operation, and increased the productivity output of machinery once warmed up and operating.
Active EMS are continually seeking opportunities to improve environmental efficiency and reduce energy and physical waste, with investment plans to further facilitate this. One current plan being researched is making deliveries via only Zero Carbon vehicles, and using suppliers who opt for Zero Carbon vehicles. Another recent example is a specific cardboard packaging design, which we generally don’t do, instead re-using packaging that components have arrived in. But in this case, we were able to create packaging for a customer that is 80% recycled.
New ideas spring from fresh perspectives, which arise from diverse backgrounds. Since people are the foundation of what makes Active EMS great, it is only natural that we turn to them for innovative thinking. Our people come from a diverse range of cultures and experiences – and the fresh thinking and passion they bring to work every day is a direct result of that diversity.
The Active EMS approach is based on a belief that all individuals should be treated fairly and should have access to equal opportunities, regardless of their status. To attract, develop and retain the best people, we are committed to respecting and embracing talent and working to support a culture that is inclusive and reflective of our vision and values. We also look for high levels of diversity and inclusion in our customers and suppliers, and encourage them to adopt similar philosophies in their relationships with their own employees, customers, and suppliers.
You work hard to ensure that your company has an ethical foundation. Likewise, you must ensure that the culture of your manufacturing partners fits with your foundation. Take the time now, before issues arise, and perform due diligence to ensure your subcontractor is not subpar. Not knowing is not an excuse. Cutting corners is not a valid business plan. Know your partners well, and choose them wisely.