The movie Blood Diamond put the spotlight on a natural
resource's availability to spark civil wars, but other conflict minerals
-- like tin, tantalum and tungsten -- are even more controversial,
although lesser known.
Why? Odds are, the smart phone or laptop you're reading this on requires at least one of these conflict minerals to work. Along with MP3 players, medical devices and other favorite gadgets, the most successful technology companies are top consumers of these resources. The SEC has the next move, deciding how the Dodd-Frank Act will impact business.
"Electronic manufacturers are gearing up for new product launches and the holiday shopping season to make up for revenue shortcomings from the first half of 2012," explained Rick Long, Vice President at BravoSolution. "These companies are now forced to table supply chain preparation to ensure that they are ready for the SEC ruling."
BravoSolution, the spend analysis company, is making sure customers are ahead of the game -- outlining how to leverage existing technology to comply with likely disclosure requirements and avoid supply chain disruptions and revenue loss in a new market brief, according to a news release. Here are three steps to address conflict minerals and avoid backlash:
Gain supplier visibility. Understand which suppliers are providing these minerals to you, where they're sourced from and if they're in jeopardy of supporting conflict. All supplier information should live in a single system that can sort and select suppliers based on multiple SEC scenarios.
Leverage technology to optimize reporting. By coupling enhanced supplier data with flexible spend analysis, you'll understand how heavily production relies on each supplier. These systems and analytics should optimize and analyze supplier data to drive real-time, actionable decision making. The ruling may require reporting down to the most granular levels such as country of origin, process facility and location of the specific mine.
Make your contracts work harder. Build conflict minerals terms directly into contracts with suppliers to ensure that what they sell to you cannot be sourced from conflict regions. This method should go deeper in the supply chain too, to include contract terms with tier-2 and tier-3 suppliers.
"There's no way to know how the SEC will rule. However, the debate about conflict minerals is already trickling down to the consumer. Much like 'ging green,' people will start to avoid buying from companies that support conflict," said Long.
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