chapter 3 ethical and sustainable sourcing

Question 1

Understand and appreciate the trends in ethical and sustainable sourcing

Answer 1

Ethical sourcing practices include promoting diversity by intentionally buying from small firms, ethnic minority businesses and women-owned enterprises; discontinuing purchases from firms that use child labour or other unacceptable labour practices; or sourcing from firms with good labour treatment and environmental protection credentials.

Question 2

Define and describe the terms: fair trade products, green purchasing, social sustainability, supply base rationalisation, VMI, supplier co-location, and collaborative negotiations.

Answer 2

fair trade; Fair trade products are products that are manufactured or grown by a disadvantaged producer in a developing country that receives a fair price for its goods.
green purchasing: making environmentally
conscious decisions throughout the purchasing process, beginning with product and
process design, and through product disposa

Question 3

Describe how ethical and sustainable sourcing strategies are developed and implemented

Answer 3

1. The firm formalises its ethical and sustainable sourcing policies.
2. Training and communication of the policies occurs among staff, users, and suppliers.
3. Prioritise items based on ethical and sustainable opportunities and keep efforts simple early on.
4. Call for the design of performance metrics to gauge the success of the company’s efforts.
5. Monitor performance and outcomes and adjust the work plans, priorities, policies, and use of suppliers to adequately meet the ethical and sustainability goals of the company.
6. Address the impact of ethical and sustainable sourcing on other facets of the organisation (departments), its trading partners and ultimately the company’s brand supply base rationalisation (supply base reduction) (supply base optimisation). This has been a common occurrence since

Question 4

Understand the use of environmental supplier certifications

Question 5

Define outsourcing and how it differs from purchasing

Answer 5

The process of having suppliers provide goods and services that were previously provided internally”. Outsourcing involves substitution – the replacement of internal capacity and production by that of the supplier.

Question 6

Discuss the importance for developing strategic alliances

Answer 6

a strategic alliance is a business relationship in which two or more independent organisations cooperate and willingly modify their business objectives and practices to help achieve long-term goals and objectives.

Question 7

Define benchmarking and discuss how it is used in strategic sourcing

Answer 7

benchmarking: the process of comparing performance against the practices of other leading companies for the purpose of improving performance.

Question 8

Understand the benefits of using 3PL suppliers

Question 9

what is strategic sourcing

Answer 9

The processes of determining long-term supply requirements, finding sources to fulfil those needs, selecting suppliers to provide the services, negotiating the purchase agreements and managing the suppliers’ performance.

Question 10

define ethical sourcing

Answer 10

Sourcing which attempts to take into account the public consequences of organisational buying or brings about positive social change through organisational behaviour

Question 11

what should be included in your ethical sourcing policy

Answer 11

*determining where all purchased goods came from and how they are made,
*knowing if suppliers promote basic workplace principles (such as the right to equal
opportunity and to earn a decent wage, the prohibition of bonded, prison or child
labour and the right to join a union),
*use of ethical ratings for suppliers alongside the other standard performance
criteria,
*use of independent verification of vendor compliance,
*reporting of supplier compliance performance to shareholders, and
*providing detailed ethical sourcing expectations to vendors.