Is your supply chain helping your reputation – or is it hurting it?

We could easily describe the supply chain as a sequence of processes behind the production and distribution of a commodity – but maybe you didn’t know that it could be considered as a reputation tool as well.

Ethical responsibility was once a blurry, merely theoretical concept. However, it has recently gained public attention. Nowadays, consumers are becoming more and more concerned about the impact of their purchasing behaviour – and they are quickly turning their backs on companies that are perceived as unethical.

The key stakeholders of the market are looking for “spotless brands”, companies whose ethical behaviour is able to reassure both buyers and suppliers. As a consequence, supply management (SM) has become a key factor: as company representatives, supply managers are called to face challenging ethical issues on a daily basis.

Things like sensitive data transference, transparency, and traceability are making supply management ethical responsibility (SMER) more and more complex – and relevant. With this in mind, we can easily understand why supply chain management can have a major impact on corporate reputation. A “reputable” supply chain is able to meet its operational goals (e.g. product quality and timely delivery) and, at the same time, can help the company becoming a better corporate citizen.

An ethical supply management marked by a green environmental impact and positive contributions to communities and society, for example, can contribute significantly to corporate reputation.

As a result, supply chains can be turned into competitive differentiators which can be used to enhance the reputation capital of a company.

Corporations with a better reputation are more likely to get a much higher level of support by their stakeholders – which means that those companies will be able to improve their business outcomes and recover faster from possible downturns. Likewise, a poor supply chain management can easily affect corporate reputation, and thus jeopardize the whole enterprise.

Too many CEOs and executives are focusing on products, marketing, and sales – often neglecting corporate reputation. Who embraces this blinkered view could easily overlook supply chain management: why should they pay attention to SM if it is already meeting the company’s expectations in terms of quality, pricing, and delivery?

This kind of approach may appear as the quickest, most suitable option – as long as everyting is fine. When something goes wrong, consumers are eager to unveil supply chain management in order to “find the culprit”. Is the company exploiting child labour? How clean is the criminal record of its suppliers? Is the company green, or is it polluting beyond the legal limits?

Paying particular attention to your supply chain can prevent reputational damage, but it can also elevate your brand reputation. In order to pursue a positive SM, you should focus on the following areas: human rights, environmental impact, and engagement with your stakeholders.

Today, reputation management has become an interesting challenge: don’t underestimate it, and always remember that eveything starts from basic common sense.