A VC in Vacationland

Repeat after me: There is no such thing as a fully sustainable, risk free supply chain. Nor will there ever be…

As hard as you and your company may try, banned materials will always sneak into the best managed supply chain. Criminals are smart and, like hackers, can figure out how to make that blood diamond into a perfectly acceptable product. The best you can do is settle for second best and work hard to eliminate as many suspect materials as possible.

Here are a few tricks to avoid major mistakes around sustainability and risk management:

1. If the price sounds to good to be true, it is: this is the universal problem faced by procurement managers-relentless efforts from above to control costs can push one to look to to less well documented suppliers. Look at the pet food scandal revolving around imports of tampered animal byproducts from China as a typical example. Cheap often comes with a price.

2.Visit the suppliers: I am constantly amazed to hear how little time procurement managers spend meeting with their suppliers at their locations. A week does not go by when Wal-Mart or others does not find themselves the victim of a supplier who 'outsourced' their contact to a disreputable colleague. Get on a plane, folks.

3. Use on line forums and other reviews to check up on suppliers: You may have set up your own process for reviewing suppliers, but others may be having less than optimal experiences with the same suppliers. Ask the suppliers about other customers and keep in contact with them about how the company is doing. You may be on the path to disaster without knowing it, if your process is missing a key check point.