Hidden in the dark corners of everyday supply chains is a US$51 billion illegal market, comprised of 40.3 million enslaved people – 75% of whom are women. From agriculture and manufacturing to domestic servitude, women are trapped in a supply chain that contains an inescapable cycle of forced labor with little to no pay, daily violence, threats, substandard conditions, and long hours.
Investigative journalists have for years exposed modern slavery in many leading brands’ supply chains. And often the response from reported companies is met with shock, denial, and silence.
But if we look closely at their released statements or lack of acknowledgment, a persisting underlying problem emerges: a lack of transparency across the entire supply chain, including the suppliers of their suppliers.
Unraveling the pervasiveness of forced labor practices in supply chains
The more connected and globalized our world becomes, the riskier supply chains become. Competitive realities are forcing businesses to make decisions that balance cost and quality as well as access and sustainability. But in an environment where cost and access are typically valued more, companies act unknowingly as an accessory to modern-day slavery.
According to Justin Dillion, CEO and founder of Made in a Free World, the best way to eradicate this problem is to help consumers and businesses buy better. During the SAP-sponsored Webcast Monitoring Ethics Deep in the Supply Chain, he said that businesses need to be empowered to “look at these issues more specifically – and do that through the lens of spend data.”
Consider, for example, a global firm with a supply chain consisting of 60,000 vendors and resellers. Such a high volume of suppliers in its network would likely include at least a couple hundred vendors that could expose operations to instances of women in forced labor. And this is not a fictional hypothetical. In fact, Thomson Reuters’ 2016 Global Third-Party Risk Survey revealed that only 36% of surveyed businesses thoroughly monitor their suppliers for risks, while 61% have no knowledge of the outsourcing activities of their third parties.
Overcoming growing complexity to end supply chain exploitation
Businesses can overcome exposure with a platform that gives a clear view of the entire supply chain. Access to real-time intelligence data from online news, media, and government organizations enable buyers, procurement managers, and supply chain leaders to make better-informed sourcing strategies. When drilling down into the data, everyone who touches the supply chain can identify high-risk exposure based on a variety of factors.
With a sense of the risks behind their purchases, they can remediate known sources of modern slavery to improve brand integrity and document it to comply with reporting regulations – but this is just the beginning. Machine learning can further extend insights by uncovering unknown, otherwise invisible, events through the detection of patterns.
Self-learning procurement processes empower businesses to connect the dots quickly between primary, secondary, and tertiary supplier relationships. This application of machine learning not only roots out hidden enslavement practices deep in the supply chain, but it accomplishes it in a way that minimizes supply chain disruption and keeps costs low.
Machine learning turns a noble purpose into a business opportunity
Machine learning gives procurement and supply chain organizations a strategic weapon for freeing millions of women from modern slavery. However, this digital approach is more than just a noble purpose. It’s a strategic investment for identifying effective supply chain practices that meet the demands of customers, investors, and employees that want to see slavery eradicated for good.
It doesn’t matter how far in the supply chain modern slavery resides. Every business along the value chain – from the originating supplier to the final seller – will feel its impact. By “walking the walk” on ethical supply chain operations, businesses are not just doing good – they’re lifting their bottom lines with new sources of growth and innovation.
For more on this topic, see Combating Modern Slavery: It’s More Than Compliance, It’s Ethics!