Partnership Groundrules

I've spent the past several weeks trying to figure out how exactly we should be working with our third-party supply chain audit partners. Part of my responsibilities will be to make sure all the factories around the world that manufacture our products respect human rights, labor rights, communities and the planet's natural resources.

I used to work at a company where we had a very big, effective team that would visit factories on a daily basis. Not only did they conduct factory audits to ensure that they were upholding the company's standards, but they also ensured that factories followed up on corrective action plans and worked toward continuous improvement. At my current company, we've decided to contract with two providers of "social compliance."

The benefits of using third-party auditors is that it can be less expensive and time-consuming than building up an internal team, third-party auditors can leverage expertise and relationships from working with other customers and many of these auditors are certified by internationally respected NGOs.

The biggest challenge I've discovered with working with third-party auditors is that they don't have skin in the game. They're required to deliver audit reports, but they're don't necessarily have the incentives to follow up with factories or to do extra work to improve factory working conditions.

With that said, I don't think it's a lost cause. I'm realizing that we have to be crystal clear with what we expect as follow-up to a factory visit and we have to create mechanisms that make our auditors accountable for remediation. We need to figure out ways for our auditors to share our goals and to "own" the responsibility of factory improvement.

So, I've taken a stab at some standard operating procedures, which I hope will get us closer to this goal, but I'm not sure how well-received they will be. Hopefully they'll be strong enough to create a new dynamic of ownership and responsibility while giving us the assurance that these factories are indeed "good" factories when we don't have the manpower or the time to visit them firsthand.