Innovation

Through its cloud-based solution, workers can safely provide anonymous feedbacks from anywhere using mobile phones or social media. In addition, retailers, organizations and governments can engage with multi-tier suppliers and monitor them in real time for human rights violations and labor abuses. Ulula's innovative solution goes beyond the technological factor by introducing a bottom-up engagement approach to social responsibility, therefore going against the traditional top to bottom practices of code of conducts.

Despite being a useful tool to communicate expected standards, codes of conducts are unlikely to produce impact. Likewise, document-oriented, sporadic and pre-arranged audits are often victims of forgeries, resulting in box-ticking exercises and “feel good" reports. Although an important instrument towards greater transparency, standard audits can be expensive, business disruptive and may not portrait an accurate picture of the existing human rights and labor conditions.

To date, retailers still focus on post-scandal remediation measures, which usually includes barring the perpetrating supplier out of the chain. However, this response neither improves the victims’ conditions nor prevents it from reoccurring, and potentially harms the local community by cutting off a vital source of employment and income. By enabling transparency and continuous collaboration among all parties, Ulula encourages companies to implement best practices throughout the entire business pipeline. As a result, it has the potential to revolutionize monitoring practices in the supply chains, help companies to comply with regulations such as the Modern Day Slavery Act in the UK and foster the development of responsible businesses.

In other words, Ulula bridges the communication gap between all those involved in the supply chains, giving a voice to employees, closing the feedback loop and promoting worker-led initiatives.

Inspiration

Ulula’s core management team has 35+ years of combined experience in energy, mining, technology and innovation, community development, and foreign aid, having witnessed communication challenges faced by companies, government, and communities. Ulula, which in Chichewa – a Southern African language - means “reveal” [2], was designed to use mobile technology as a way of increasing inclusiveness, resolving grievances and improving communication in the mining sector. During the pilot phase, it focused on stakeholder engagement and created an effective channel for community members impacted by mining projects to voice their concerns. However, with companies often times arguing that they are simply unable to identify and monitor their lower-tier suppliers, Ulula’s developers started asking themselves if their innovation could be used as a tool for monitoring supply chains, fight human rights violations and labor abuse in different industries.

Based on the principle that with knowledge comes responsibility, Ulula’s platform was adjusted to collect data from different sources and track metrics such as the number and the scope of complaints, resolutions implemented and changes to the factory’s policies and procedures. Although all data collected is encrypted, Ulula allows local managers, civil society organizations, governments and retailers to have access to employees’ complaints on a need-to-know basis, thus creating a stakeholder supervision framework. This approach is based on the acceptance that systematic changes require collective action.

Due to legal and physical constraints, retailers would be unable to effectively and efficiently respond to issues outside of their companies, leaving them with the option to turn a blind eye to the problem or discontinue their relationship, neither of which benefiting any of the parts involved. However, by exerting proper supervision and engaging with other stakeholders, retailers can assist suppliers in changing their practices and implementing meaningful and lasting improvements.

[2] "Ulula," [Online]. Available: http://ulula.com/who-weare/.

Overall impact

At the individual level, Ulula provides a simple tool, in the local language, through which workers can voice their grievances and reach out to stakeholders who would otherwise be inaccessible. By enhancing the connectivity between different parties, Ulula advances communication and overcomes existing barriers. Stakeholders’ continuous monitoring improves suppliers’ responsiveness and reduces the risk of employees being singled out and punished. In turn, civil society organizations bring expertise in dealing with human rights violations as well as cultural understanding.

Ultimately, Ulula empowers individuals and provides the support they need to blow the whistle and take a stand against unacceptable conditions, thus inspiring worker-led initiatives and bottom-up changes.

At the community level, data collection assists in uncovering social patterns that perpetuate existing inequalities and allow for human rights violations to remain the local norm. It can also be used to inform consumers and engage them in using their combined purchasing power to support companies that are embedding social and environmental sustainability strategies into their core businesses. Consumers’ product boycott can indeed significantly dent operational revenue and force companies to reconsider their internal policies and procedures. "We believe that with the right information, consumers will make better choices, voting for socially responsible business with their wallets. There are many consumer-facing apps and information resources, many of which rank brands based on their policies and not necessarily on their performance. We hope that one day worker voices will also be included in these rankings." Vera Belazelkoska (Ulula Director of Programs).

At the business level, Ulula can be used as a risk management tool and as a business strategy, enabling companies to take advantage of globalized supply chains without having to compromise their values and risk being associated with human right scandals and labor abuses. Moreover, suppliers can “lower the risk of operational disruptions, employee turnover, and absenteeism.” [1]

At last, aggregated data can be used to support the creation of governmental policies aimed at producing systematic changes, as governments play an important role in shaping industries through regulation and rule enforcement.

[1] Ulula. [Online]. Available: http://ulula.com/product/.

Business benefit

As a risk management tool, Ulula improves supervision, facilitates the identification of early warnings, offers actionable insights, facilitates the resolution of grievances and favors preemptive measures, therefore minimizing the risk of losses due to unethical behavior. As a business strategy, Ulula can be a key driver of success, through the enhancement of supply chain resilience and quality assurance, which promotes business continuity and avoids costs associated with regulatory breaches and product recalls, respectively.

Although somewhat counterintuitive, in the long term, Ulula also benefits poor performing suppliers. Inadequate work conditions result in lower levels of employee productivity, higher turnover rates, training costs, and absenteeism as well as greater risk of labor disruptions. In addition, due to increasing regulatory and consumers’ scrutiny, retailers may blacklist suppliers that insist on not complying with minimum standards in order to avoid having their names implicated in human rights and labor outrages.

As Ulula implies long-term relationships and stakeholders’ collaboration, supplier switching cost is likely to increase, which could improve suppliers’ ability to renegotiate contractual burdens imposed by retailers for the purpose of reducing their overall operational cost at the expense of supplier’s operational margins.

More importantly, at a time where societal trust in business is sharply declining, supply chain transparency champions can use Ulula to improve brand perceived value and strengthen their license to operate.

It is worth highlighting that Ulula is a for-profit business that has social impact and financial return in “lock-step”, which means that there is no tradeoff between them. As the company scales its operations it increases both revenue and social impact.

Social and environmental benefit

Ulula’s business proposition is in line with UN Global Compact definition of sustainability supply chain's objective, which requires the creation, protection, and growth of “environmental, social and economic value for all stakeholders involved in bringing goods and services to market.” [3]

While globalization has been the source of many societal developments, it is certainly not free of flaws. Ulula’s developers have created an instrument that offers businesses the ability to minimize the negative externalities derived from globalized supply chains through engagement, collaboration and supervision. In the worlds of its creators, Ulula “connects businesses, workers, communities, and governments to de-risk operations and create value across global supply chains”. [4]

Ultimately, Ulula reminds us that businesses have an important role to play in upholding human rights and that stakeholder collaboration is key to solve complex societal issues. It also challenges the common belief that the retailers’ ability to enforce ethical standards throughout the supply chain is impaired by the complexities inherent to globalization, as well as jurisdictional boundaries and other constraints. When asked what she thought was the purpose of businesses Vera Belazelkoska replied that “business shall provide goods that are responsibly and ethically produced and that fulfil needs without harming the people and the planet”. Ulula’s social impact can be assessed through different lenses and extends significantly beyond improving transparency.

In summary, Ulula employs technology and harnesses the power of data analysis as a means to foment responsible production as well as promote peace, justice, and stronger institutions, thus being a catalyzer of systematic changes.

[3] U. N. G. Compact, "Supply Chain Sustainability A Practical Guide for Continuous Improvement," 2015.

[4] Ulula. [Online]. Available: http://ulula.com/.

... by Sebastian Trzcinski-Clément (http://ulula.com/perupilot/) credit: Wikimedia Commons (http://ulula.com/how-responsible-supply-tech-is-helping-tackle-modern-slavery-and-human-trafficking/)

Interview

Vera Belazelkoska, DIRECTOR OF PROGRAMS