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Sarbanes Oxley : Technology : Supply Chain

Building A Safer Supply Chain




David Curran
CEO
Integrity Interactive

Integrity Interactive Corporation a company that helps leading global corporations manage and reduce the risk of compliance failures, have announced the formation of the Supplier Ethics Management (SEM) Charter Group. The SEM Charter Group is a working coalition of global branded companies combining their expertise to help develop specific practices and technologies that will ensure the integrity of products built and delivered through extended global supply chains.


Three world-class companies – Ryder System, Inc. (NYSE: R), H. J. Heinz® Company (NYSE: HNZ ), and bioMérieux, Inc. (Euronext: BIM) – are founding members. These companies are joined by a variety of other companies all focused on improving the integrity and compliance of global supply chains.

“Integrity Interactive works with hundreds of the world’s leading companies and we’ve seen that supply chain vendors can introduce serious, even dangerous problems if actions are not taken to demand ethics and compliance within the supply chain,” said David Curran, CEO of Integrity Interactive. “Our survey data showed a critical need for cross-industry cooperation to develop standards and capabilities that will help companies maintain safe, ethical supply chains. Ryder, Heinz and bioMérieux, are examples of leading companies who share our concern for the importance of monitoring their supply chains. They have been instrumental in forming this industry group, working together to enhance product integrity and legal compliance.”

SEM Charter Group Members

Ryder System, Heinz and bioMérieux bring to the SEM Charter Group a unique combination of global supply chain expertise across the logistics, transportation, food and healthcare industries.

“As industries have globalized, the logistics and delivery of components and finished products has become a key component of a safe supply chain,” said Marcia Narine, Vice President, Global Compliance and Deputy General Counsel, at Ryder System. “Ryder is proud to share our expertise and best practices through the SEM Charter Group. A secure, ethical supply chain is good for vendors, suppliers and consumers and Ryder is dedicated to making that happen.”

“There can be no more fundamental need than for people to know that their food has been grown, processed, packaged and delivered through a unimpeachably safe, secure supply chain,” said John Kraus, Vice President of Corporate Governance, Compliance and Ethics at H. J. Heinz Company. “At Heinz this is our core capability and we are pleased to help develop practices and solutions that can ensure ethical supply chain practices for other companies and the public. Even without regulation companies must be stringent in their processes and they have to insist on the highest standards.”

“Integrity’s technology provides us with a much more comprehensive compliance program,” said Dan Biondo, Vice President North America Purchasing, bioMérieux, Inc. “Currently, our North American employees participate in training programs to help us build an ethical culture. Now as members of the Charter Group, we are active partners in both the development and evaluation of Integrity’s innovative supplier ethics program. bioMérieux understands when it promotes an ethical culture both within bioMérieux and into its supply chain, it is exposed to less risk in running the company.”

A Serious, Growing Problem

During 2007 the public became aware of the problems and dangers of an unethical supply chain. A series of highly publicized problems with unsafe cars, toys, food, medicine and other products highlighted the risks to consumers and to the companies that depend on extensive supply chains of subcontractors.

An Integrity Interactive Q4 2007 survey of 108 Global 2000 companies showed that many corporate ethics, compliance programs and controls do not extend to their global supply chains. The survey found that 78 percent of companies do not include suppliers in their company code of conduct and nearly 58 percent were not sure if their company regularly assessed ethics risks in the supply chain, the network of companies that collaborates to deliver a product or service to customers.

Many enterprises around the world are unaware of how effective supply chain ethics and compliance programs can help them avoid costly recalls and brand damage that results from a supply chain ethics scandal. Supplier ethics management (SEM) is a relatively new business practice that enables companies to manage their suppliers and supply relationships through strategies, programs and metrics that better align supplier business conduct with purchaser standards. The goal is to reduce a purchasing company’s overall risk of corporate integrity failure in the supply chain by aligning supplier conduct with purchaser standards in three major areas of corporate integrity: compliance, ethics and corporate responsibility.

In the globalizing economy, most companies outsource much of their manufacturing to a network of external suppliers. While many large U.S. companies have implemented some degree of ethics and compliance programs and training, the survey indicates that a great majority of Global 2000 companies have not extended these programs and practices to their supply chain. This is a significant risk to the financial health and reputation of these companies and to their customers.

The SEM Charter Group will work to improve the current situation in which:

• 88 percent of respondents do not maintain a platform for identifying, tracking and communicating with suppliers
• 78 percent of respondents do not include suppliers in their company’s Code of Conduct
• 58 percent of respondents don’t regularly assess compliance risk in their supply chain
• 56 percent of respondent companies do not audit supplier compliance with Code standards

The demand for organized SEM programs is being driven by regulations, business partners, consumers, and media organizations. The changes include stronger import/export standards, product safety rules, and labeling requirements. Companies have to take actions to be more stringent in their processes and need to demand the highest standards internally and from their suppliers. Members of the SEM Charter group are taking the following actions:

• Making ethics and compliance a factor in supplier selection
• Creating and maintaining compliance histories profiles of important suppliers
• Assigning ethics and compliance personnel to major supply relationships
• Conducting regular assessments of supplier ethics
• Targeting and segmenting suppliers by importance and ethics risk

Integrity Interactive helps leading companies and large organizations build ethical cultures that reduce risk. We design, develop, and deliver programs and services that mitigate risk in three areas: compliance, ethics, and corporate responsibility. Our comprehensive culture-building and risk reduction services include: Strategy and Assessment; Training and Communication; and Measurement and Reporting.

Integrity Interactive works with hundreds of the world’s greatest companies, and serves millions of employees on six continents.

For more information about Integrity Interactive, please visit www.integrity-interactive.com.

The H. J. Heinz Company, offering “Good Food, Every Day™,” is one of the world’s leading marketers and producers of branded foods in ketchup, condiments, sauces, meals, soups, seafood, snacks, and infant foods. Heinz satisfies hungry consumers in every outlet, from supermarkets to restaurants to convenience stores and kiosks. Heinz is a global family of leading brands, including Heinz Ketchup, sauces, soups, beans, pasta and infant foods (representing nearly one-third of total sales or close to $3 billion), HP and Lea & Perrins, Ore-Ida French fries and roasted potatoes, Boston Market and Weight Watchers Smart Ones meals, and Plasmon baby food. Heinz’s 50 companies have number-one or number-two brands in 200 countries, showcased by Heinz Ketchup, The World’s Favorite Ketchup.

Information on Heinz is available at www.heinz.com/news.

Ryder provides leading-edge transportation, logistics and supply chain management solutions worldwide. Ryder’s product offerings range from full service leasing, commercial rental and contracted maintenance of vehicles to integrated services such as dedicated contract carriage and carrier management. Additionally, Ryder offers comprehensive supply chain solutions, consulting, lead logistics management services and e-Business solutions that support customers’ entire supply chains, from inbound raw materials and parts through distribution and delivery of finished goods. Ryder serves customer needs throughout North America, in Latin America, Europe and Asia.

Ryder’s stock is a component of the Dow Jones Transportation Average and the Standard & Poor’s 500 Index. Ryder ranks 362nd on the Fortune 500 and 1,458th on the Forbes Global 2000.

For more information on Ryder System, Inc., visit www.ryder.com.

A world leader in the field of in vitro diagnostics for over 40 years, bioMérieux is present in more than 150 countries through 36 subsidiaries and a large network of distributors. In 2006, revenues reached €1.037 billion with 83% of sales outside of France.

bioMérieux provides diagnostic solutions (reagents, instruments, software) which determine the source of disease and contamination to improve patient health and ensure consumer safety. Our products are used for diagnosing infectious diseases and providing high medical value results for cardiovascular emergencies and cancer screening and monitoring. They are also used for detecting microorganisms in agri-food, pharmaceutical and cosmetic products. bioMérieux is listed on Euronext Paris.

Other information can be found at www.biomerieux.com








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