Purchasing practices
It is important to think of 'ethical trading' in the context of the
whole buying process. Poor purchasing practices have both commercial
and ethical impacts. Corporate buying – particularly in the retail sector – is a key driver of commercial success. And most companies have carefully thought out the process. But even if the purchasing process is optimised from the buyer’s perspective it may still cause operational challenges for suppliers and ultimately have a negative impact on working conditions. There are important issues of buying culture and power balance: How does the relationship between buyer and supplier work? Does the buying culture support improvements in suppliers? Or are suppliers seen as replaceable?
Our report 'Buying your way into trouble' established four important areas relating to commercial purchasing practices and ethical trade programmes:
- the importance of adhering to the critical path – the buying company's own blueprint for how the purchasing process should work;
- issues of buying culture, power balance and availability of skills and resources;
- the need for better communication and operational integration among different actors in the supply chain; and
- evidence that poor purchasing practices have commercial impacts as well as an impact on workers.
