Retailers can support a more sustainable supply chain with the latest cloud service from software giant Oracle.

The Retail Supplier Evaluation service extends Oracle’s merchandising capabilities to add visibility and transparency into the ethical and environmental practices of all suppliers.

The cloud application enables retailers of all kinds to access and evaluate the governance of suppliers based on their ethical, environmental, safety and quality performance practices. By being able to make more effective, sustainable and responsible sourcing decisions as part of the merchandising procurement process, retailers can manage risk across their supply chain, protect their brand image, and more easily identify greener and more ethical sourcing options.

For example, using its supplier evaluation dashboard, a fashion retailer can realise its production of denim is resulting in a high level of chemical pollution and consuming 10,000 litres of water per item. By reviewing its suppliers’ environmental and ethical credentials, the retailer can adjust its providers to make more responsible sourcing decisions that reduce water waste and chemical pollution.

“Consumers are increasingly prioritising environmentally friendly and ethically sourced goods,” said Mike Webster, senior vice president at Oracle Retail. “To continue to succeed, responsible and sustainable sourcing needs to be at the forefront of a brand’s continued innovation efforts. Oracle Retail Supplier Evaluation will enable businesses to make effective and responsible decisions across their supply chain and confidently communicate this supplier information to their customers, ultimately building brand loyalty and increasing revenue.”

Shareholder and consumer expectations are putting a new level of accountability and pressure on executives to bring sustainable products to market. In fact, nearly 60% of consumers recently said it was important that retailers’ brand values, such as sustainability and ethically sourced materials, aligned with their own. McKinsey estimates that two-thirds of the average company’s environmental, social and corporate governance (ESG) footprint lies with suppliers, and those companies with strong ESG credentials can drive down costs by five to ten per cent.

Retail Supplier Evaluation augments Oracle’s retail merchandising procurement process by giving buyers additional data to evaluate existing suppliers or identify new ones. With the cloud service, retailers can enable vendors to report their compliance through scored assessments, audits and certifications, and change management practices. This operationalises supply chain ESG performance as part of the standard merchandising procurement process. With better visibility and insights across the supply chain, retailers can assess how changes and alterations will impact their ESG score and enact change management processes to help ensure smooth integration of new suppliers with limited disruptions.

“Because consumers expect businesses to operate with people and planet in mind, they expect companies to be transparent related to the impacts of their businesses,” said Jordan Speer, research manager at IDC Retail Insights. “To earn loyalty, retailers need to operate ethically and with transparency, pulling back the curtain to allow the consumer to see how the sausage is made. It requires work to provide that visibility, but it unlocks a treasure chest of new opportunity that creates competitive advantage through differentiation. Consumers will pay for products and services that are produced sustainably. They will pay to connect with the brands and people involved in creating and producing their products.”

With Supplier Evaluation retailers can help ensure more sustainable products through:

• Assessments: Users create or use pre-defined assessments to measure a supplier and their supply chain against various standards, policies or retailer-defined needs. Suppliers are invited to complete relevant assessments as a part of their onboarding, re-evaluation or new policy workflow process.
• Audits: Retailers can further evaluate a supplier by scheduling and conducting on-site facility audits and visits, collaborating on non-conformances, monitoring and workflow corrective actions, and determining an overall conformance score.
• Governance: Documents can be tracked for readership and acceptance, and later the adoption of new policies, standards and regulations. This centralised location can house policies, standards, training material, processes, guidelines and regulations for employees and external suppliers.
• Changes: The workspace includes news and urgent action notifications to inform all applicable users visibly of changes, expectations and activities.
• Certification: Once vendors are evaluated, users can register and upload certified evidence, validation and conformance that the facilities meet the industry standards, specific declaration and the criteria set by the organisation.
• Performance: Retailers can create critical processes to ensure all appropriate steps, activities and measurements have been completed during registration, re-evaluation, new policy roll-out and ongoing performance. Performance dashboards enable monitoring each assessment, audit, certification and adoption against each supplier, facility and supply chain. Scores can then be aggregated by a supplier, category, standard and policy.

Oracle Retail Supplier Evaluation will be generally available this month.