Trip Trap: Managing Certification in the Global Supply Chain

A small Danish design company is working with its largest supplier in Thailand to improve health, safety and environmental conditions, as well as work standards as a central element of compliance with the principles of the United Nations Global Compact. The company takes its Corporate Social Responsibility (CSR) agenda seriously and has developed a new CSR standard in its supplier factories, which is implemented and verified by a non-governmental organization. New challenges arise when the focus is on the certification of production equipment such as wood. Although Western small and medium-sized enterprises (SMEs) are under pressure to audit their suppliers in developing countries, these SMEs often lack the financial and political resources to change behavior in supplier factories. The company’s quality manager must evaluate its approach to sustainability. How much leverage can a small business expect from its vendors? Also, is the cost of auditing suppliers too high in a country like Thailand?

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