Supply chains need a modern approach to eliminating modern slavery
Stories like Vannak Prum's are all too common.
He left his home in Cambodia after being promised a job that would let him support his pregnant wife, but he only found a life of horror. He would spend three years forced to work up to 20 hours a day on a fishing boat off the coast of Thailand. His captors beat him with a tail of a stingray - just as they beat another worker who they deemed wasn't producing as much as he should.
Prum would eventually escape, diving off the boat and swimming miles to shore using emptied fish sauce containers as buoys. Odd to say, given all he endured, but he might be considered one of the lucky ones.
Today, the International Labour Organization (ILO) estimates that 21 million people around the world are in forced labor, which it defines as "all work or service which is exacted from any person under the menace of any penalty and for which the said person has not offered himself voluntarily."
This makes human trafficking in the form of forced labor sadly prevalent across global supply chains. People around the world are coerced to fish and farm, mine and manufacture, their handlers - "labor brokers" who connect the desperate-for-work to the despicable-for-profit - seeking to make money in what's been estimated by the ILO to be a worldwide industry of more than $30 billion.
It is a practice deeply and unfortunately embedded in supply chains across multiple industries and nations. And it touches even the most iconic of companies. Nestle recently admitted, after a year-long internal investigation, that slave labor was involved in the production of its Fancy Feast cat food brand. Other well respected companies have also recently been caught up in forced-labor accusations.
As The Guardian wrote when reporting on the Nestle case, "It's hard to think of an issue that you would less like your company to be associated with than modern slavery." And recent legislation in the U.S. and UK extend the ramifications beyond just hugely negative PR.
Yet even though they're surrounded by horror stories and cautionary tales, are modern supply chain leaders using modern tools to make sure they're eradicating modern slavery from their production lines? Or are they just hoping they don't become the next Nestle?
Hope isn't a strategy, and neither are the inefficient and incomplete methods many supply chains currently employ. Data and analytics represent a better way forward.
The scourge of human trafficking adds just another layer of complexity for today's supply chain leaders. Pricing pressures, high-volume demands and tight - some would say unrealistic - deadlines have forced many large corporations to expand the number of suppliers they work with. As this supplier web grows, visibility into the scruples of all those suppliers - not to mention the suppliers of those suppliers - is harder and harder to achieve.
Traditional surveys and affidavits with suppliers only get you so far. They take time and people and are difficult to verify and keep current.
Enter data. Data-inspired insight is key to understanding all of a company's most valuable relationships. Supplier relationships are certainly no different. Analyzed constantly and consistently, updated regularly and scoped globally, we've seen data and analytics improve the efficiency and performance of procurement teams we work with at Dun & Bradstreet.
Through that work, we've come to recommend a five-part approach that activates data and analytics to create a comprehensive, up-to-date and global view of the potential of human trafficking risk in your supply chain.
1. Create a holistic view to identify risky suppliers
• Paint a complete picture of each supplier's corporate structure. Know their parent company and subsidiaries, because what is on the surface might look like a reputable supplier might have hidden subsidiaries you want no dealings with either directly or indirectly.
• Know the locations where each supplier operates.
• Make sure your data shows one common record for the supplier, not multiple, perhaps conflicting identity information.
• Make sure the picture includes more than just Tier 1 views. To understand the suppliers your company works with directly, you really need to know their suppliers and on down to have a complete view of your supply chain. Synched data should give you a point of view on these sub-tier suppliers as well.
• Determine the criteria of a risky supplier particular to your company.
• Create quick and consistent analysis and scoring of suppliers based on that risk profile.
2. React to the discovery
• Prioritize your supplier base on whom to monitor first.
• Conduct supplier outreach and deep additional monitoring - right down to site visits as necessary - when you've identified potential for human trafficking.
3. Comply and Report
• Ensure that you track your status versus your internal goals and external regulations.
• Report any findings to the proper authorities.
• Take immediate action to replace suppliers who have high risk of connection to forced labor.
• To avoid the potential disruption of taking a supplier offline, make sure you've used data and analytics and your risk criteria to have created a qualified list of pre-screened replacement suppliers
5. Monitor constantly
• Stay on top of regulations and new hot spots - industries and geographies with higher likelihood of human trafficking
• Don't assume because a supplier is fine at one time that they will continue to be; examine and update your data regularly to make sure you have an eye on suppliers within those hot spots
• Conduct regular audits and report internally and externally your findings to ensure your company is operating ethically and not indirectly supporting companies that may be using forced labor.
When you approach it this way, blending the scale and speed of data and analytics with human expertise, something important happens: You go from reacting to a problem that's already occurred to proactively seeking out and eradicating problems before they wreak havoc with your supply chain efficiency, your brand reputation and, ultimately, your bottom line.
At Dun & Bradstreet, we're proud to do our part to help suppliers achieve this by marrying deep analysis of company firmographics within our database - the world's largest, with more than 250 million global company records - to data from the U.S. Department of State and the ILO. With the launch our Human Trafficking Risk Index, we aim to shine the light on those dark corners of supply chains. By using State Department and ILO information on countries and industries of increased risk, the index layers on our analysis to score suppliers on a scale of 1-7 for likelihood of involvement in human trafficking - helping separate signals from genuine problems that demand action.
Reliable data regularly analyzed by analytics experts helps account for parts 1 and 2 of the approach outlined above. You get a perspective of which suppliers operate in critical geographies such as Southeast Asia or are associated with at-risk sectors and the 120 or so commodities - such as palm oil, a very common ingredient in multiple products - that have had common instances of forced labor.
Yes, this approach will keep you ahead of government regulatory pressure. Yes, you will maintain brand equity with increasingly informed and connected consumers who know more than ever when their favorite brands aren't behaving ethically.
But at the end of the day, the most valuable thing you're doing is giving people like Vannak Prum a chance at a better life.
Data has disrupted many industries. Let's make sure human trafficking is next. It might be the most important one yet.