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Are You Ready to Meet Supply Chain Sustainability Requirements?

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Globalization of the automotive industry has led to the development of increasingly complex supply chains.  Decisions made by one company may affect worker safety, environmental compliance and the financial performance of their suppliers and/or customers several levels removed from them in the supply chain and in different parts of the world.

Understanding and managing these potential risks has become a strategic priority for the industry.  AIAG’s member companies are working together to reaffirm our commitment to doing business in an ethical and socially/environmentally responsible way. They are also providing access to the necessary guidelines, assessment tools, education and training, and other collateral materials needed by companies of all sizes to meet/exceed the sustainability performance expectations of their customers.

Here, Mary Ellen Bridges and Elly Bradford share their perspectives on this comprehensive collection of guidelines, tools, and trainings. Bridges, purchasing sustainability manager, human rights and working conditions, at Ford Motor Company, and Bradford, manager, North American purchasing for Honda North America, co-chair the Working Conditions work group.

AIAG: What is the project history and who is involved?

Bridges: AIAG, in cooperation with the sponsoring auto manufacturers, has been conducting global corporate social responsibility training for automotive suppliers since 2004. These supplier training sessions have focused on a complete range of human rights and working conditions, business ethics, and environmental responsibility topics. Since inception, the automotive industry has trained almost 2,500 suppliers in 9 countries. 

In 2014, together with efforts from AIAG and CSR Europe, the global automotive industry joined forces and published the Automotive Industry Guiding Principles to Enhance Sustainability Performance in the Supply Chain. These guidelines are based on the fundamental principles of social and environmental responsibility that are compliant with local law, consistent with international expectations, and supported by the sponsoring auto manufacturers. They serve as the foundation for the corporate responsibility work conducted around the world.  In order to provide our suppliers with a consistent message aligned with the revised Guiding Principles, the AIAG Working Conditions work group reviewed the current supplier training materials and identified opportunities to more effectively communicate our expectations to our suppliers.  As a result, the existing supplier training materials have been updated with additional tools and training content with more emphasis on the in-country workshops. FCA, Ford, General Motors, Honda, and Toyota all directly contributed to the development and translation of the revised training curriculum.           

AIAG: What is the target audience? 

Bradford: The automotive industry’s most important resource is the diverse group of men and women who provide services and components to produce our vehicles. These individuals working within the industry are afforded responsible working conditions and environmental considerations, and must be treated with dignity and respect. To help suppliers within the automotive industry better understand the fundamental principles of social and environmental responsibility, AIAG is offering these training tools to Tier 1 suppliers with the expectation that they will cascade the information throughout their sub-tier supply chain. The key is to share the principles broadly and deeply throughout the entire automotive supply chain.

AIAG: What are the project offerings?

Bridges: The three components of the revised Supply Chain Sustainability training curriculum complement each other to provide a comprehensive training curriculum for suppliers aligned with the automotive industry expectations.

  1. eLearning  

  2. Knowledge Assessment

  3. Supplier Workshop  

The eLearning is a 50-minute overview of the key topics covered in the Guiding Principles.  This module is aligned with conventional International Labor Organization (ILO) and United Nations (UN) guidance. Following the eLearning module, individual practitioners can test their knowledge via the Supply Chain Sustainability Knowledge Assessment. The Knowledge Assessment is a 45-question questionnaire designed to provide feedback directly to the participant on their mastery of the subject matter.  

Together, the baseline knowledge gained from these elements will enable a more interactive and productive dialogue in the Supply Chain Sustainability Supplier Workshop. The workshops, held in-country, include local law discussion and interactive dialogue on best practices and potential solutions to common issues identified.   

This approach is intended to be flexible and allow participants to take the on-line modules at their convenience and to cascade them easily to their supply base. All modules of the training will initially be offered in English, Chinese, Italian, Portuguese, Spanish, and Turkish. These recently launched materials are available online, and in-country training sessions will begin in 3Q 2015.

AIAG: What are the objectives and the benefits to the supplier, and how can they engage?

Bradford: It is critical for all suppliers within throughout the entire automotive industry supply chain to respect working conditions, environmental conditions, and business ethics. The industry has a responsibility to play an active role in educating and sharing the Automotive Industry Guiding Principles to Enhance Sustainability Performance in the Supply Chain on a global basis.

Through this activity, suppliers will gain knowledge on all the key social and environmental principles, allowing them to improve their operations as well as the operations at their sub-tier suppliers. Building capability throughout the industry on these important topics will support the suppliers’ long-term sustainability. Collaboration is vital to success, and collective action will minimize costs and lead to greater results for all parties. 

The eLearning and Knowledge Assessment — available now on www.aiag.org — are intended for Tier 1 suppliers and the sub-tier supply chain. This will ensure a consistent message throughout the supply chain, aligned with OEM expectations. In-country supplier workshops are currently being developed for Brazil, China, and Mexico, with release targeted for late 3rd quarter/early 4th quarter, 2015.

Get Started

Suppliers are strongly encouraged to start with the Supply Chain Sustainability eLearning before executing the Knowledge Assessment, which will provide a baseline of their understanding and show where their enterprise and its team members need more education and training.

  • Automotive Industry Guiding Principles to Enhance Sustainability Performance in the Supply Chain. The guidelines — based on fundamental principles of ethical, social, and environmental responsibility — are compliant with local law, consistent with international expectations, and supported by sponsoring automotive manufacturers.

  • AIAG Supply Chain Sustainability eLearning. This free on-line course highlights the fundamental principles of responsible working conditions and the expectations of FCA, Ford, General Motors, Honda, and Toyota in the areas of Child Labor, Forced Labor, Freedom of Association, Harassment and Discrimination, Health and Safety, Wages and Benefits, Working Hours, Environmental Responsibility, and Business Ethics.

  • AIAG Supply Chain Sustainability Knowledge Assessment (practitioner level). This free on-line assessment includes terms and knowledge common to the automotive industry and is designed to help on-board employees who have been assigned to lead or champion their company's sustainability efforts. This is not a certification program. The questions are general in nature and any distance from 100 percent score should be insightful as to your current understanding of this content and its use in the automotive industry. The assessment will also help identify areas where additional education or training may be needed.

  • Supplier Sustainability Self-Assessment (enterprise level). A collaborative team of automotive and sustainability professionals created this free standardized tool for gap analysis and process improvement, including a method by which suppliers can report on their sustainability activities and data with a single response provided to multiple customers.

  • Supply Chain Sustainability Workshops. In-person workshops scheduled throughout the world will use case studies and industry best practices to highlight the fundamental principles of responsible working conditions and expectations of automakers such as Fiat Chrysler Automobiles, Ford Motor Company, General Motors, Honda, and Toyota.

For more information on AIAG’s supply chain sustainability tools, visit www.aiag.org or contact AIAG customer service at (248) 358-3003.