The Reason Supply Chain Responsibility is a Must

• By: Staff Editor
• Date: January 19, 2017

The Reason Supply Chain Responsibility is a Must

Supply chain management – a term coined in the early ‘80s when globalization and outsourcing spread their wings to seek offshore hubs to reduce costs, and source labor and materials closer to their operational and production setups in emerging economies. While supply chain management found its definitions and parameters, the need for supply chain responsibility came quick at its heels.

The Era of Supply Chain Responsibility

Probably the first big name to be embroiled in controversies surrounding supply chain mismanagement back in the ‘90s, Nike denied that the poor labor conditions at its contractors’ factories offshore could be deemed their responsibility. They were wrong.

Seeking to quell the PR nightmare that followed, Nike drafted safety standards, policies and environmental regulations for suppliers and contractors – albeit, without adequate controls or oversight. That didn’t work either and they paid the price for it: child labor and a myriad other unethical workplace practices emerged to pull down their earnings by as much as 69% in 1998.

Nike’s saga soon instilled the importance of supply chain responsibility in corporates and businesses that sought to take advantage of the quickly developing global supply chain. A couple of decades later and more recently, Apple, along with its suppliers in China - Foxconn and Pegatron - proved once again that corporates can no longer brush aside their supply chain responsibility - not in a world that is immensely close-knit and where the repercussions of any irresponsible sourcing or practices can find its way to the better-regulated home turf in an instant.

From Unethical Workplace Practices to Modern Slavery

While children are still stepping out of sweatshops, there are others boarded up at sea and suffering a form of slavery that the rest of the world is just beginning to see. Abused and sometimes even chained onboard unlicensed vessels are an undocumented workforce that knows little about the passing of time or the evolution of laws that seek to protect them.

In 2015, major journals like the NY Times and the Guardian extensively reported incidents of Thai shipping boats and their crew of forced laborers – men who sought lawful employment and were sold to captains of vessels that sailed in horrific conditions to supply the demands of the seafood industry.

The U.S imports around 90% of its seafood consumption from other countries across the world. The consumptive demand loophole in the Tariff Act of 1930 allowed the U.S to import goods to meet demand that domestic production could not supply. Less than a year ago, in what was among his landmark legislature, President Obama amended the act to ban the entry of goods sourced from convict, forced or indentured labor into the U.S.

Supply Chain Responsibility in Every Industry Vertical

From fisheries to electronics, both product and service oriented businesses must now thrive in an age where supply chain responsibility is not an evolving model, rather an established rhythm that sets the tone of your business. In that, businesses must embrace:

• Responsible, responsive and sustainable supply chains
• Supply chain transparency to assure customers and regulators
• Improved practices by working with local suppliers/contractors, ensuring close oversight and instilling ethical practices
• Maintaining supply chain compliance data, including recording instances of non-compliance
• Supply chain audits with in-house personnel and external auditors and local NGOs
• A corporate strategy well-aligned with global guidelines set by the International Labor Organization, the UN Sustainable Development Goals, and others

Related Training:

Achieving Sustainability Results with ISO 26000

Protecting Your Business with the 5 Critical Conflict Minerals and Anti-Trafficking Regulations

A to Z of Supply Chain Management

Sources:

http://www.forbes.com

https://www.greenbiz.com

https://oecdinsights.org