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BBC firm steps up auditing

December 2009

The BBC’s commercial arm is to intensify its ethical supply chain measures by extending its focus to secondary suppliers in high-risk countries and primary suppliers in lower-risk territories.

BBC Worldwide, which sells  books, toys, magazines, DVDs and other TV and radio spin-offs, has spent two years developing an auditing system for frontline factories in Asia. It is now turning its attentions to Asian manufacturers that provide components to its main suppliers, and to first-tier suppliers in European countries that until now have been lesser targets for social auditing.

David Halford, head of ethical sourcing, told EP that BBC Worldwide has now established a robust regime for main suppliers in countries such as China, India and Singapore, and that it is time to push its influence further down the supply chain.

‘We’ve got to the point where we know what the landscape is, so phase two is to do the same process with other suppliers who are perhaps not used to the culture of third-party auditing,’ he said.

‘Then we’ll move into territories such as the European Union, the US, Japan and New Zealand, which we know are not without their own risks.’

Halford said initial measures will probably involve asking component suppliers to complete self-assessment questionnaires, but they could then become more detailed.

The company, which has an annual £1billion ($1.7bn, €1.1bn) turnover, is also piloting ‘capacity-building’ workshops for four first-tier suppliers, under which it pays the Impactt consultancy to show them ways of reducing working hours and increasing wages without damaging productivity.

‘The factories love it,’ said Halford. ‘Previously factory managers saw our ethical policy as an unwelcome additional cost of doing business with us, but they now realize it has the potential to help them financially by improving working processes and increasing productivity.’

Halford said the results will be assessed ‘before we think about how best to extend the project’.

BBC Worldwide, the UK’s biggest publisher of children's magazines, which every year buys 45 million toys, puzzles and stationery sets – many attached to magazines – began its ethical supply chain programme in earnest two years ago. It has had an ethical code, based on the Ethical Trading Initiative’s base code, for ten years, but reissued it this summer.

Factory audits are conducted under the auspices of Sedex, a membership organization for businesses committed to improving ethical performance in their supply chains. Once the semi-announced audits have been performed by consultants from companies such as Bureau Veritas, SGS and Intertek, every factory is graded according to a red, amber and green traffic light system.

BBC Worldwide buyers are forbidden to raise purchase orders unless the factory in question has achieved an amber or green grade. Where serious failures exist, production and distribution are suspended until they are resolved.

A rolling programme of additional audits, by the BBC Worldwide ethical team, is also conducted.

The company has recently instructed its buyers and marketing teams to ‘adhere absolutely’ to schedules to avoid putting undue pressure on suppliers.




BBC | Global | Supply Chain Management

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