MetricStream Social Compliance Management Solution provides a comprehensive framework and an integrated and automated approach to manage all social compliance requirements. The solution consolidates and streamlines all supplier social compliance processes, ranging from social compliance policy/ code of conduct management and communication, to supplier on-boarding information, to policy training, to survey and certification management, to compliance monitoring, to audits and reporting.Download a Solution Brief
Across the world, big brand retailers, apparel manufacturers, and organizations dealing in Fast Moving Consumer Goods (FMCG), Consumer Packaged Goods (CPG), and consumer electronics are thriving. Many are rapidly tapping into global markets, expanding their products portfolio, and extending their supply chain to new corners of the world. Today, the largest names in the business have hundreds of brands under their belt, and thousands of stores across numerous geographies.
But surfacing frequently in the midst of all this exhilarating growth are sweatshop allegations and reports of unsafe working conditions, underage workers, abuse and discrimination, and other unethical practices at the workplace. In response, many organizations have developed comprehensive codes of conduct, and implemented controls, guidelines, supplier audits, and compliance monitoring programs to ensure that the codes of conduct are followed across all supplier locations.
Why Social Compliance
Social compliance, a part of Corporate Social Responsibility (CSR), is gaining increasing traction world-over, especially with global brands proactively promoting responsible sourcing, enforcing sustainability practices, and setting up programs to contribute to their communities.
There are of course organizations that adopt a reactive approach to social compliance. However, this is risky as Non-Governmental Organizations as well as the media and Internet are increasingly bringing to light unpleasant and unethical working conditions in some of the most reputed global brands.
Across the industry, there is a strong move to ensure that all products are made and sold in a socially compliant manner i.e. in a way that fulfills minimum social standards relating to working hours, wages, health and safety, child/ slave labor, environmental pollution, and other such issues.
Several NGOs such as the Fair Labor Association (FLA) and the Worldwide Responsible Accredited Production (WRAP) are focused on creating awareness about responsible practices by providing information, tools, and training to organizations and their suppliers across the world. Meanwhile, associations such as the Global Social Compliance Programme (GSCP) and AIM-PROGRESS have developed best practice processes and methodologies to share supplier audits and assessment results, and build better supplier capabilities.
Multiple compliance guidelines and programs have also been developed to ensure acceptable standards of working conditions. They include the Business Social Compliance Initiative (BSCI), Electronic Industry Code of Conduct (EICC), Ethical Trading Initiative (ETI), International Council of Toy Industries (ICTI) Care Process, Social Accountability International's SA8000 standard, and Sedex Members Ethical Trade Audit (SMETA).
Organizations that are committed to fulfilling these guidelines, and building well-thought out and well-implemented social compliance programs definitely have a competitive edge over others. Investors and stakeholders are confident in their credibility. Customers are drawn to their brands. Employees are more satisfied. In short, these organizations are seen as reliable and trustworthy institutions that are committed to their people and communities. The result? Enhanced brand reputation and loyalty, and stronger stock performance.
Challenges in Managing Social Compliance
Complex Supply Chains
Organizations have numerous suppliers spread all across the world. Managing them in an efficient manner is hard enough. Monitoring social compliance and handling supplier audits is even harder, as each supplier will have its own complex network with numerous employees and business locations that need to be audited and inspected for compliance.
Differing Laws across Locations
Part of social compliance involves adhering to certain local laws and requirements. However, these laws may differ from one region to the next. For instance, the minimum age for employment in India is 14, but in China, it is 16. In the UK, one is allowed to do "light work" at the age of 13. Tracking the differences in these laws, and ensuring that they are enforced and monitored appropriately can be extremely time-consuming and exhausting.
Point Solutions and Manual Processes
Many organizations manage social compliance operations through point based solutions or manual and paper-based processes. Tasks, notifications, and follow-ups are assigned and managed using email systems which may lack the ability to track task completion. Supplier audit reports are prepared using spreadsheets which can be quite time-consuming to fill in, and unwieldy to manage. Moreover, they might end up having errors which could prove costly. As for third-party audits, multiple auditors use their own systems or manual processes. Thus information silos are created between the organization and its auditors. To gain a single view, the organization needs to manually aggregate the information or perform complex data integration tasks.
To monitor social compliance, controls need to be implemented, resources allocated for regular internal audits, inspections conducted at multi-global locations, training programs provided at regular intervals, and third party auditors hired to deliver objective reports - all these tasks and more can be extremely cost-intensive, and could divert resources and attention away from the core business.
Given the sheer size of most supplier networks, it is essential for organizations to gain a clear, birds-eye view of social compliance issues and corrective actions. They should also be able to effectively schedule and manage audits, track and monitor inspection results, communicate inspection findings to stakeholders, and collaborate with suppliers to implement corrective actions. However, most organizations use isolated or independent supplier management systems and processes which don't provide sufficient visibility or transparency into social compliance.
An Integrated and Automated Social Compliance Program
Given the increasing number of suppliers that organizations interact with, it is important to have a single point of control. Not only does this simplify the management of suppliers, it also increases visibility into their status of compliance with ethical, social, and environmental requirements. Executives within the organization can easily track how safe supplier workplaces are, or how closely suppliers are following labor laws, etc.
A single, integrated social compliance approach helps streamline various compliance management and audit processes - right fromdefining minimum social and environmental standards, to communicating them to suppliers , to ensuring that they are enforced, to monitoring compliance with the standards through regular audits, inspections, and assessments.
An important part of social compliance management is implementing and monitoring compliance controls within the organization, and at supplier locations. An example of a control within the organization could be screening potential suppliers to ensure that they aren't practicing child labor. At the supplier location, controls could range from regular fire drills for employee safety, to hotlines for reporting abuse or discrimination, to insisting on birth certificates that prove that no employees are underage. Testing all these controls regularly is essential, and is ultimately the responsibility of the organization who has hired the suppliers.
Auditing is another essential part of monitoring social compliance. A truly effective audit program takes into consideration multiple sources of information such as compliance policies, health and safety records, observations, employee feedback, and management feedback. Auditors must try and determine that all records are authentic, and that all compliance activities have been implemented on a sustainable basis - not just for the sake of the audits. Sometimes, suppliers provide the illusion that they're complying with social compliance policies, when in fact they aren't. Talking to employees helps provide some clarity into these areas. Third party audits also provide objectivity, and validate internal audit findings.
Whatever the results of the audits and social compliance inspections, they should be reported in a manner that facilitates better decision-making. A social compliance program should be able to provide constructive recommendations, and help identify areas for improvement. It should also be able to adopt a centralized approach to managing all issues and corrective actions. This helps organizations understand and identify issues and trends across the supplier network. It also helps leverage existing best practice corrective actions to resolve multiple issues.
Organizations should automate social compliance wherever possible - be it control monitoring, reporting, or alerting stakeholders to various tasks. Automation enables social compliance managers to eliminate cumbersome administrative tasks, and instead focus their time and attention on more value-added activities such as analyzing audits to identify areas of improvement.
The MetricStream Solution for Social Compliance Management
MetricStream Social Compliance Management Solution provides a comprehensive framework and an integrated and automated approach to manage all social compliance requirements, including:
The solution consolidates and streamlines all supplier social compliance processes, ranging from social compliance policy/ code of conduct management and communication, to supplier on-boarding information, to policy training, to survey and certification management, to compliance monitoring, to audits and reporting.
The solution is built on a scalable enterprise GRC platform which enables organizations to efficiently manage and monitor compliance for their entire network of suppliers. In doing so, they facilitate a consistent culture of social compliance, integrity, and accountability across the enterprise.
The solution automates multiple processes, enabling organizations to save substantial resources, time, and costs. It also provides a number of advanced capabilities such as dashboards, flexible reports, a centralized document repository, and email based notifications and alerts which help organizations gain optimal value from their social compliance programs. The solution's inherent flexibility and scalability support anticipated business growth, complex business processes, and dynamic data.
Features and Functionalities of the MetricStream Solution
The MetricStream solution enables organizations to manage all aspects of their social compliance program, including:
Code of Conduct and Social Compliance Policy Design
The MetricStream solution provides a flexible framework to streamline the creation and management of policies and codes of conduct for compliance with local labor laws, working conditions, environmental requirements, legal requirements, and ethical standards. It also provides a central repository to efficiently store and maintain all policy and procedure documents. Integrated collaboration and workflow tools simplify the creation, modification, and review of policy and procedure documents globally in a controlled manner.
Enforcement of Policies and Training
The MetricStream solution provides configurable automatic notifications and alerts to facilitate the communication and acceptance of codes of conduct and social compliance policies among suppliers. It also enables self-assessments, surveys, and certification from suppliers to validate that all their facilities are compliant. Using the solution, organizations can facilitate training and awareness about social compliance policies and codes of conduct. They can also maintain training courses in a comprehensive repository, and ensure that all training requirements are fully met and recorded.
Supplier On-boarding and Information Management
The MetricStream solution simplifies, accelerates, and streamlines the complete supplier information management lifecycle right from supplier registration, to on-boarding, to qualification and the annual re-qualification process. During the supplier registration and qualification process, the solution enables suppliers to upload their company profiles, financial information, and other documentation. It also allows profile records to be created with contact information, service offerings, website information, and other details. To process supplier registrations, the solution provides multiple data entry points, workflows, email notifications, and internal approval functionalities. Additional advanced tools are provided for supplier profile edits, re-qualification, and approval queues.
Social Compliance Audits/ Supplier Audits
The MetricStream solution provides a single framework to centrally manage all scheduled and unscheduled audits and inspections of supplier facility safety, employee experience, employee health, and other social compliance requirements. It simplifies coordination and collaboration on inspections, enables efficient assigning of tasks, and assists in tracking all inspection results and remediation activities. It also streamlines the complete audit lifecycle and enables auditors to take into consideration multiple sources of audit information, including employee and management opinions, and existing controls. Issues are automatically communicated to the respective stakeholders at the supplier location, enabling them to take timely action to resolve the issue.
Automating and Facilitating Third-party Audits
The MetricStream solution helps in planning and scheduling audits at supplier locations and factories. It also helps in organizing audit history, audit reports, records on disciplinary actions, history of previous issues and corrective actions, email records, and other relevant data so that they are made availableto third-party auditors on a timelybasis. During the audit, the solution captures relevant information exchanges between the third-party auditor and the supplier. It also helps organize audit workpapers, interim status reports, exception sheets, draft comments, and other social compliance findings or issues. Organizations can follow a collaborative and consistent process for managing and tracking key examination findings, reviewing draft reports, and taking appropriate remedial actions on key issues identified.
Issue Management and Corrective Action
The MetricStream solution enables a systematic and consistent approach to capturing, investigating, and resolving all non-compliance issues. It accelerates issue management, facilitates collaboration with suppliers, and reduces repeat occurrence of issues through a closed-loop remedial action process. Automatic alerts and notifications, delivered to the appropriate personnel, keep the process on track and ensure that all issues are taken through timely investigation and remediation.
The MetricStream solution standardizes reporting processes across all suppliers. It provides the flexibility to configure both ad hoc and scheduled reports with metrics based on a wide variety of parameters such as by process, by status, and by business unit. Powerful graphical dashboards provide real-time visibility into the status of social compliance at the supplier location, and can be accessed globally. The ability to drill down provides an easier way to access the data at finer levels of detail. In addition, quarterly and monthly trending analyses enable compliance managers to stay in touch with the ground reality and progress on social compliance programs at the supplier location.
- Enable a systematic and structured approach to managing social compliance and supplier audits
- Save costs and resources by automating critical social compliance process such as entry of audit/ inspection findings and reporting
- Streamline end-to-end social compliance and audit processes for the entire network of suppliers
- Seamlessly integrate internal systems with supplier systems to gather and consolidate all the information necessary to assess and ensure social compliance
- Control and monitor end-to-end social compliance initiatives from a single, centralized framework
- Align social compliance with corporate compliance to avoid redundancies and overlaps
- Efficiently track, investigate, and manage allegations of non-compliance with labor laws and other social compliance requirements
- Stay updated on social compliance issues and trends in the industry