Because of the cross-cutting nature of managing a company’s supply chain impact, questions regarding suppliers are included in both the Community Impact Area and Environment Impact Area. The focus of general supply chain management is, however, centered in the Supply Chain Management goal in Community, recognizing that both suppliers themselves (and the impact a company has on them), and their workforces, are members of the broader global community in which a business operates and impacts.
For the purposes of the BIA, suppliers are vendors of products or services that account for your company’s expenses, including expenses within a company’s cost of goods sold. Suppliers exclude: pay-rolled salaries and bonuses, rent and utility costs (water/energy/gas//internet/garbage collection, etc.).
Costs from labor benefits (e.g. private health insurance supplier), however, should be included. Independent contractors that are not considered workers (do not work indefinitely or greater than 20 hours per week indefinitely or for greater than a 6 month period) should be included.
While the notion of supply chain impact is often associated with companies who buy and sell physical products, all businesses, including service companies, have suppliers, and thus can have a positive impact with their supply chain management. Service companies might have suppliers that include graphic designers, office supplies, public relations, or independent contractors/freelancers. While service companies are still asked about their suppliers in the BIA, however, these questions are less detailed for their circumstances and less heavily weighted in your company’s overall score to recognize that the impact is not as material as other sectors.
Significant Suppliers are a company’s largest suppliers that collectively represent approximately 80% of your purchases on a cost basis terms. Significant Suppliers can include both suppliers of physical items and service providers like accountants and web designers. Goods or services sourced through a cooperative should be considered one Significant Supplier.
Local suppliers are owned and operated within the same community of your company or the relevant facilities in which it is used. While the size and distance of a community may vary by context, they should generally be based on a small-scale economically and culturally connected area like a metropolitan area, or in rural settings the county, as well as its surrounding vicinities (usually within 50 miles). This does not include a local branch of a company headquartered elsewhere.
Independent suppliers are privately owned (i.e. not publicly traded), are not a franchise of another company, and are not a wholly- or majority- owned subsidiary of another company.
Outsourced Staffing involves using a third-party organization to replace their own staff. For example, a company might outsource its internal HR functions, customer support services, or use a temp-agency to fill temporary jobs where those temporary workers are actually working for the temp-agency rather than directly on the payroll of your company. If a company pays a temp agency and the workers are on the payroll of the agency rather than that of your company, then the agency is considered a supplier, and the individuals are not considered workers in the BIA, but would be considered in any questions specific to subcontracted staff/services.