Engagement with Suppliers
In 2009, and managed by 300 procurement professionals, BT spent £8.9 billion with over 2,000 suppliers providing a huge range of products and services from Network equipment to corporate clothing. As our supply chain is becoming increasingly global we have built procurement delivery centers around the world to source skills, products and services from more countries. We know that environmental and labour regulations may be poorly enforced in some countries and there is a risk that standards are below acceptable norms. Procurement has a small CSR team that drives supplier CSR performance globally using in-country resource where possible. This programme was aimed at removing the “cat and mouse” and unproductive auditing approach and placing responsibility for CSR firmly with the leadership of the suppliers engaged.
Before embarking on the initiative, cross functional key stakeholders to Chief Procurement Officer level were engaged and the business case for conducting the programme made. I.e.: By linking long term business to good CSR behaviors and sustainable improvement, the risk of brand damage is reduced. BT’s reputation is enhanced and the need for regular costly and largely unproductive “audits” is greatly reduced, thus greatly reducing “in life” costs. Performance to agreed key performance indicators and scorecards, can then be monitored by In-country BT resource.
Using existing collateral and a clear project overview to influence wider BT stakeholders and gain their support, procurement outlined the objective of achieving a step change in CSR performance, focusing onlabourstandards & environmental management. In early 2009 Key BTRetail suppliers CSR performance was base-lined by procurements’ CSR team using high impact techniques. Following supplier feedback and coaching, CSR development plans and CSR “scorecards”, underwritten at CEO level, were produced by suppliers and closely monitored, with further coaching provided where necessary to ensure the impetus of improvement was not lost. Included in the trial was a company being “managed out” for consistently poor CSR performance. The CSR team managed to turn this supplier around by replacing the traditional “audit” approach with collaborative assessment techniques directed at all levels within the organisation, engaging at board level and listening to workers. We injected CSR impact through good leadership focussed on listening, coaching and support, rather than solely identifying failure and demanding improvement. Through open dialogue and obtaining board level agreement to continuous improvement, we achieved unprecedented levels of CSR transparency. It has been sobering to hear how emerging country managers regard some western CSR programmes, however through this collaborative approach we believe that hearts and mind of senior managers have been won, or at least significantly impacted, at the targeted suppliers. This was not a soft option for suppliers, with CSR now a significant contract adjudication element, energy reduction / climate change impact a contractual requirement and the consequences of failure to engage in continuous CSR improvement made clear.
This unique approach to the complexities of CSR, especially in emerging counties, has provided better than anticipated results, with the trial suppliers conducting over 300 credible supplier assessments based on the BT approach and delivered a suppler CSR conference, featuring a BT CSR team member as key note speaker. Suppliers have measurable improvement in terms of carbon management, environmental and labour standards performance. This success provides the model we are deploying for the remaining BTRetail suppliers and 2009 has seen a significant rise in both the number, and more importantly the quality, of CSR assessments by BT suppliers on their supplier base. In terms of numbers this approach far surpasses anything BT could do alone. Suppliers themselves recognise the value of engaging in this process, as do other service providers who are now benchmarking with us to learn our approach. We can see tangible improvements in the everyday working lives of workers in the BT supply chain. Key lessons learnt are that investing in the relationships at a senior level and winning hearts & minds as well as giving clear process guidance is essential for this approach to succeed.
We exceeded our expectations with this program. Available impact evidence includes: comprehensive assessment reports, photographs of BT Procurement leading CSR workshops with well known brands, gap analysis, short, medium and long term CSR development plans, CSR scorecards in place for all key suppliers, numerous stakeholder and supplier bouquets and “before & after” photographs. We’ve seen a significant reduction in BTRetail CSR risk ratings of all suppliers engaged, unprecedented levels of CSR transparency, and some impressive standout achievements e.g. energy reduction of 26 % per 1000$ sales.
Suppliers are taking our message and techniques to their suppliers with impressive results. All suppliers are now performing with integrity and have impressed the end customers, such as a major high street brand, who has recognised the achievement by BT in turning supplier CSR performance around. Our internal stakeholder customer satisfaction measure is running at 100% very satisfied for the first time, we know workers lives have improved because they tell us so, and the wider CSR agenda is now taking root at all the targeted suppliers.