Since April 2017, many companies have been obliged to publish a so-called CSR report (Corporate Social Responsibility). This report requests information on how the company deals with issues relating to the environment, employees, social responsibility, respect for human rights and the fight against corruption and bribery. This also includes suppliers.

In general, you should monitore them on a permanent basis – even if you do not (yet) have to provide a CSR report. However, the further away the suppliers, the more difficult it is to get them to meet their obligation to supply CSR-relevant data.
Howeve, there is a good news: a large number of external auditors and index lists have been evaluating the sustainable actions of suppliers and manufacturers in the textile industry during the last fews years. As a result, more and more questions on environmental and social issues are being taken into account throughout the entire product life cycle.

One of the best-known index lists is the Higg Index, a uniform methodology for collecting sustainability data in textile production. The basis for this self-assessment tool is a catalogue with more than 100 different features, which are used to record the complete life cycle of clothing products in a web-based database, covering materials, production, packaging, transport, use and disposal. In this way, the products of the participating fashion brands can be compared. In addition, there is a whole range of sustainability certificates, which my vary in their focus highlighting sometimes ecological aspects, sometimes social or occupational safety aspects.

The Challenge

It is difficult to reliably document and track the actual supplier behaviour regarding compliance with sustainability aspects and the validity of certificates. Only then, however, possible orders might be suspended if pre-defined minimum standards are not met – either promptly or after a specific period of time which had been clearly communicated to the supplier before.

ERP Systems are a Convenient Solution because…

They realize monitoring, communication with the supplier as well as the decision taking process whether an order may be triggered or not. For this purpose, suppliers are authorized to upload their certificates and annual CSR reports independently into the ERP system via a specially set up audit and certificate management system.

An interface is created for real-time data retrieval to databases of index lists such as Higg. The user then determines which sustainability criteria are important or less important to him. These criteria are then linked to the product data. Depending on the company’s preference, this data can influence value-added processes. For example, an order could be blocked if the supplier or product does not meet the required criteria.

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