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Impact of Covid-19 on management of supply chains

Report analysing the impacts of Covid-19 on tackling modern slavery by big UK-based businesses.

This report, entitled Implications of Covid-19 for modern slavery challenges in supply chain management, was developed by Dr Bruce Pinnington and Dr Joanne Meehan from the University of Liverpool Management School and Dr Alex Trautrims from the Rights Lab at the University of Nottingham. The outputs from this project include a full report and a Research Summary. The research was funded by the UK Arts and Humanities Research Council as part of the open call for research on the impact of Covid-19 on modern slavery.

This research looked at procurement and supply chain managers’ perceptions of the impact of Covid-19 on their firms’ commitment to addressing modern slavery in their supply chains. The project held two focus groups with expert practitioners, policymakers and influencers to understand the extent and nature of supply chain disruptions. They then surveyed nearly 500 UK-based supply managers in procurement or supply-chain functions from companies that fell within the reporting requirements of the Modern Slavery Act (2015).

Key findings:

  • Pandemic-related disruptions impacted all aspects of business supply chains, logistics and internal operations
  • There was an increase in the priority that respondents attached to modern slavery during the pandemic, but this remained lower than commercial and operational concerns
  • Other areas of concern included: rate of supplier turnover, expedited due diligence processes, impact of demand volatility and drivers of supply chain visibility
  • Covid-19 has improved firms’ knowledge about their supply chains, creating an opportunity for this to knowledge to be applied in a modern slavery context
  • 80% of those surveyed believe stronger legislation is needed in relation to the Modern Slavery Act’s corporate reporting requirements

Priority recommendations:

Policy recommendations:

  • UK Government should build a weighting for modern slavery reporting and action into tender evaluations as part of the forthcoming Procurement Bill. This should be a scored element and the Cabinet Office should extend social value guidance for tenders to include modern slavery scoring.
  • Within Section 54, mandated reporting requirements should include steps taken to reduce the impact of demand volatility on modern slavery. Forms should plan inventory and ordering in collaboration with wider supply chain to minimise bullwhip effect.
  • Due diligence should not be constrained to sourcing phase, data on risks and supply chain structures should be regularly updated. The UK Government should adopt collaborative supplier relationship management practices through its significant contracts and encourage its strategic suppliers to collaborate with peers on initiatives to address modern slavery.

Practitioner recommendations:

  • Firms should map structures for key supply chains and analyse operational and ethical risks.
  • Firms should collaborate widely with peers, either directly or through third parties.
  • Firms should extend supplier management practices beyond tier one and assume ethical responsibility for their whole supply chain.