Challenge
A global automotive manufacturer contacted RCS to develop a robust Responsible Sourcing Management System (RSMS) to meet stakeholder expectations and to be consistent with the client’s brand reputation and mission.
The challenge was to develop an overarching management system that covers multiple raw materials within their components, and that provides enough flexibility to prioritise among and categorise hundreds of suppliers that deliver them.
Solution
RCS’s Responsible Sourcing Advisory team developed a RSMS in line with the OECD Due Diligence Guidance customised to the size and context of the client’s operations, built upon their existing sourcing practices. The RSMS contained a set of practical tools.
Step-by-step:
- RCS’s team first conducted a thorough gap assessment of all relevant policies and management practices of the company.
- Next, the team worked closely with the client’s relevant teams to close all gaps and develop a systematic approach to prioritise and manage due diligence activities. This included developing an internal process on how to collect, analyse and report due diligence data collected from the supply chains, particularly of minerals critical for battery manufacturing.
- The project team also developed a consistent approach to assess supplier performance and risk exposure, allowing a systematic review of existing sourcing policies and practices considering the various obligations and expectations that apply to the client’s operations.
- Developed a practical tool for supplier risk assessment, resulting in a risk rating that allowed the selection of appropriate risk mitigation and monitoring strategies.
Impact
The automotive manufacturer now has a robust system to receive, categorise, and manage due diligence data, as well as a clear strategy for engagement with suppliers at tier-1 and beyond. The company gained a much better understanding of the major risks in its mineral supply chain and can now confidently prioritise suppliers for enhanced due diligence and risk mitigation as well as demonstrate leadership in responsible sourcing good practices.
In addition, RCS Global continued to work with the client to produce a responsible sourcing report, leveraging the data collected via the RSMS.
