Retail Conflict Minerals Due Diligence Case Study

by Source Intelligence

on July 15, 2014

Discover how Source Intelligence’s scalable, cost-effective Conflict Minerals Solution has given this retailer confidence that it will be able to meet due diligence disclosure requirements.

 

Overview

 

Customer: Large Retailer

Challenge: Scalable, full-service solution for mapping a complex supply chain for conflict minerals compliance

Solution: Conflict Minerals Program

  • Traced multiple materials to smelter level
  • Highlighted companies and regions of concern
  • Assessed conflict minerals origin potential for complex product
  • Improved manufacturer-retailer relationship

 

Customer Challenge

 

When retailers and manufacturers learned of Section 1502 of the Dodd-Frank Consumer Protection Act in 2010, they knew it would have a far-reaching impact on their business practices. In preparation for the ruling expected by the U.S. Securities and Exchange Commission (SEC) on the scope of Section 1502, one major retail company set out to trace the supply chain of a flat-screen television it carried in its stores nationwide so it could assess the potential risk that conflict minerals were present in the finished product.

The challenge: Map and bring transparency to a supply chain comprised of hundreds of suppliers, including multiple primary and back-up suppliers for hundreds of components used to produce the flat-screen TV. With assembly in Asia, the retailer also faced language barriers, which increased the challenge of obtaining necessary information from its suppliers.

 

The retailer approached Source Intelligence for an full-service solution that would enable the company to quickly gain a clear picture of its supply chain and highlight any suppliers or regions that may indicate a risk of conflict minerals sourcing.

 

Our Solution: Conflict Minerals Program

 

Focusing on the gap between finished product and the source smelters, Source Intelligence’s unique solution provided an automated approach to assessing the potential for conflict minerals in the supply chain of the flat-screen TV.

Source Intelligence used its proprietary technology to automate the tracing process. Suppliers were prompted to complete an online form about parts they provide and upload supporting documentation. This process was repeated throughout the supply chain until the origins of the materials were identified. Source Intelligence’s data management platform, Source IntelligenceTM, utilized proprietary algorithms to process the collected information: it compared the data to masses of supply chain data and assessed the potential for the presence of conflict minerals, thus highlighting companies and regions of particular concern. The platform generated a simple, concise product disclosure statement that summarized the supply chain map, traceability and risks.

 

Results

 

Leveraging Source Intelligence’s data, technology and expertise, the retailer was able to trace its supply chain for conflict minerals back to originating smelters. At the same time, engaging suppliers helped to improve knowledge of the regulations and increase supplier cooperation and response rates. The manufacturer-retailer relationship itself was improved after suppliers recognized that the retailer’s efforts were needed to meet regulatory requirements rather than circumvent existing supplier-customer relationships. Source Intelligence was able to provide the retailer with a verifiable risk assessment for the TV as a whole. Ultimately, Source Intelligence’s scalable, cost-effective solution has given the retailer confidence that it will be able to meet due diligence disclosure requirements once the final ruling has been made.

 

Request a demo with one of our conflict minerals experts to see what our program can do for you!

 

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