CXO

SAP Ariba looks to redefine 'good' with supply chain transparency

With an estimated 20-30 million forced labourers in global supply chains, SAP Ariba is leveraging its network and the cloud-based applications delivered on it to help companies determine where they might be exposed to the risk of slave labour and take action to wipe it out.

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Image: iStock/Getty Images, yavuzsariyildiz

Every day, products bought and used globally have been made by people subject to slavery or forced work conditions. According to human rights organisation Anti Slavery, there is evidence of slavery in different stages of supply chains from the production of raw materials — for example cocoa, cotton, or fishing — to manufacturing every-day goods such as mobile phones or garments, and even at the final stage, when the product reaches the market.

There are an estimated 20 million to 30 million forced labourers in global supply chains today.

However, governments are starting to take note, with legislation in place in the United States and the United Kingdom. Proposed legislation in Australia, similar to the UK Modern Slavery Act, will help combat the inhumane practices still apparent.

Big business is also stepping up to the plate.

SEE: Ethics policy: Vendor relationships (Tech Pro Research)

In 2015, global ERP giant SAP and its procurement arm SAP Ariba partnered with Made In A Free World, a network of individuals, groups, and businesses that work together to disrupt slavery and combat human trafficking.

"Slave and child labour is rampant in supply chains around the world. But it doesn't have to be," founder and CEO of Made In A Free World Justin Dillon said previously. "We live in a digitally connected and data-driven economy. We have the tools and information needed to uncover slavery and end it."

By bringing the very real issue of human trafficking in the supply chain to the attention of the companies around the world who use Ariba, the software giant hopes to "redefine good" in the global supply chain.

Speaking with TechRepublic, Padmini Ranganathan, VP of Products & Innovation at SAP Ariba, said tracing the supply chain is an opportunity not many other organisations have. With the Ariba network boasting over 1 trillion dollars-worth of business-to-business transactions globally, Ranganathan said her organisation is uniquely placed to make an impact on wiping out forced labour.

To Ranganathan, what is holding organisations back from having put transparency practices in place is the mammoth task of data aggregation. Even if an organisation was to gather the information in its ecosystem, there are still thousands of companies unaccounted for. It's also a very expensive task, she added.

But by providing a cloud-based solution, Ranganathan said SAP Ariba is able to be the aggregator on behalf of its customers. It also helps that the organisation enables quite a large volume of commerce through its cloud procurement system.

"We need to not just focus on cost and profitability, but also focus on the good and the impact this can generate," she said. "We can generate momentum in business, we help create that impact — not just cost, but impact."

SAP Ariba has created a "good conscious marketplace", a place where buyers and sellers have transparency over each other's practices.

"A supplier who is actually doing good can share that good with multiple buyers on the network," she explained. "We've uncovered 3,000 opportunities just in the last three months alone."

Somewhere along the way, Ranganathan said the tech industry forgot that by creating so many systems, it was actually fragmenting the data and the context.

So SAP Ariba pieced the information into a single suite connected back to SAP systems that gives the entire context from the customer, from the point of demand through to where from and what the company is sourcing.

This is how supplier relationships are being established, Ranganathan said. SAP Ariba currently gathers third-party data from over half a million data sources.

SEE: Special report: How to choose and manage great tech partners (free PDF)

Ranganathan explained that suppliers who are doing good can mark themselves as high-impact and provide enough verification data on their own.

"The good news is that more and more companies are coming forward and saying, 'I need to do this because I need to define what good looks like for me as a company,'" she said. Organisations are realising they need to actually take the effort to define policy as well as empower staff to make the right decisions, she added.

"There's clearly a shift that has happened — and I've been in the supply chain area since the late 80s, early 90s — I've seen this change and grow."

Ranganathan said it's not enough to know if there's child labour in cocoa beans farms in Ghana; it needs to be in the context of where organisations' contracts are established so it hits home harder. It also makes it easier to drive polices from within.

"It's not an overnight solution, but transparency can start that momentum," she added.

To keep the momentum going, the change needs to be driven by the board.

"If technology can help genomic studies and cure cancer, why not also have it cure forced labour," she added.

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About Asha McLean

With a degree in Communications, and a background in technical writing, Asha has left the engineering world and joined the ZDNet team in Sydney as a journalist.

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