Crossing the Hurdle of Ethical Sourcing With Outsourcing

Bel Ami School

Numerous business owners pride themselves on being ethical and fair to their employees. Leaving a smaller carbon footprint is rapidly gaining importance as a selling point for products across the market. Producing high quality products in an ethical and socially responsible environment is possible in a small scale set-up where personal supervision over every step of production is plausible.

Outsourcing – A necessary evil on the road to expansion?

Outsourcing is very often the easiest route to expansion even to global shores. Is it possible to still retain the core values of a business including ethical sourcing and fair compensation despite outsourcing?

Various certification bodies and partnering with charitable organizations helps business owners retain their unique set of ethics even through the model of outsourcing.

Bel Ami School Headbands – A case study

Erin Fitzpatrick owns Bel Ami School Headbands, a Toronto jewelry and hair accessories company. She supplies customized jewelry to universities and private schools. Launched in 2009, the company was aided and mentored by the Ontario Ministry of Economic Development, Trade and employment’s Summer Company Program.

The $3000 grant from the government program moved her business from her parents’ basement to the studio at the Toronto Fashion Incubator. According to Fitzpatrick, her jewelry is unique as it is produced in a safe, clean environment and the employees are cared for and adequately compensated for their time and effort.

She says, “From the beginning, it has always been important to me to produce an extremely high quality product in a socially responsible way. In my industry, employee well-being is the most critical aspect of social responsibility.”

Working in the “beautiful spot in a heritage building with lots of windows and lots of space” ensures that her employees are in a safe environment. The problem arises when she wishes to expand her business.

Today she manufactures accessories only for the female student population, but she wishes to expand into the men’s jewelry arena with products like cuff links and tie clips amidst other items. Further, Erin Fitzpatrick is looking beyond Canadian shores, particularly at American universities and other schools across the globe.

This global expansion necessitates the integration of outsourcing into her business. The process will however unequivocally take control over the working environment and sourcing of material out of her hands. She would like to continue her dedication to corporate social responsibility as it is a selling point, more so in her target demographic of young college going crowd that has embraced fair trade and sustainability.

Her goal is find ethical manufacturing, in other words contractors who adequately compensate their employees and provide fair working conditions for them. Further, the materials used in the product should be sourced from ethical sources or should support charitable or environmental causes.

Asking the authorities for help

Companies like American Apparel and Canada goose manufacture all their products in-house. This means that they are able to supervise working conditions and ensure the well-being of their employees. This however, need not be the only means to the end of ethical manufacturing.

There are numerous systems of verification and labor standards that can be adopted according to one’s own unique needs. Authorities like the UN Global Compact, (the Canadian arm), might be able to help Fitzpatrick with her situation. Other companies that are in similar situations provide their own tips and tricks to help other business owners through similar forums.

Also the SA8000 Social Accountability standard is a globally respected and accepted standard for auditing and defining work places. Asking the SA8000 is a good starting point to understanding how to continue corporate social responsibility through outsourcing.

Co-operative memberships for ethical trade and similar trade organizations are willing to provide help and advice small business owners on fair trade practices. Members often share their sources and suppliers who are reliable and fair. With tools that can help find prospective suppliers and a questionnaire that can help weed out the good suppliers, a membership to such organizations is valuable.

Most organizations agree that personally meeting suppliers and if possible touring their premises gives business owners an idea about the trade practices and ethics followed by the supplier. Social compliance programs in factories usually implies timely delivery of quality goods.

The power of personal recommendations has been underscored amply across businesses. In choosing business partners as well there is no replacement to recommendations. Organizations like the Fair Labor Association certify trade practices. Between certifications and recommendations, choosing a business partners becomes easier.

Organizations that care about the planet also indicate good and reliable trade practices. Donating to fundraising programs through the business also satisfies some of the corporate social responsibility.

Mixing outsourcing with corporate social responsibility and ethical sourcing is therefore possible, albeit a tad more tedious.

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