Issue link: http://www.insightdigital.biz/i/145038
Companies may need to obtain supplier certifications or audits and even tour facilities to confirm vendor statements regarding the origin of raw material. In the end, sometimes a firm won't know from where its supplier is getting its material and if it's conflict-free. The company will then have to decide how critical that supplier is and whether to continue to procure from them. Crucially, they'll be looking just as closely at small, private suppliers as large, public ones. Some of Wisconsin's industries, such as the paper sector, use little of this material, and compliance shouldn't be a problem. But many Wisconsin companies produce manufacturing equipment that has numerous assemblies that could include conflict minerals, especially those with electrical components. Many firms will find they are using a significant amount of these metals sourced from any number of suppliers. A detailed risk assessment will help expose high-risk areas. Some suppliers will be able to give their customers complete, reliable information; others won't. Companies may need to obtain supplier certifications or audits and even tour facilities to confirm vendor statements regarding the origin of raw material. In the end, sometimes a firm won't know from where its supplier is getting its material and if it's conflictfree. The company will then have to decide how critical that supplier is and whether to continue to procure from them. Smaller companies that don't have big company resources should consider the following: » Understand key customer CSR expectations. » Develop strong partnering relationships with suppliers. » Understand where their suppliers source materials. » Adopt a sustainability policy in which they communicate to suppliers their desire to not use conflict minerals unless they are conflict free. » Consider marketing to their customers their commitment to responsible supply chain strategies and policies. Companies should generally create a cross-functional team with procurement, engineering, sales, outside legal advice and accounting/ consulting advisors as necessary to assist with establishing a program, policy and supplier questionnaire. Proactively considering a CSR company strategy will help you respond to the inevitable customer inquiries and scoring that comes from large public companies and put sustainability of your customer relationships on firm footing. F Jeff French, CPA, is Grant Thornton's audit practice leader for Wisconsin in the firm's Appleton office. He has served companies in the manufacturing, distribution, service and technology industries. w w w.in s i g h t o n m f g . c o m July 2013 • / insight on manufacturing | 23