Tag: social responsibility

Teaching Tip: The Steep Price of Bottled Water

Indian fishermen pushed their boat through plastic waste last month in Mumbai.
Indian fishermen pushed their boat through plastic waste last month in Mumbai.

Almost all of our students are interested in and concerned about helping to save our planet. So when you cover the subject of Sustainability in Supplement 5, here are some facts that may lead to a lively discussion (from The New York Times–Nov. 1, 2016).

  1. For the first time, bottled water is expected to outsell soft drinks in the U.S. Some 49.4 billion bottles of water were sold here last year, and each is having an effect on the environment.
  2. More than 1/2 of Americans drink bottled water, despite the fact that tap water is free and is generally of very high quality.
  3. Producing a bottle of water uses about 2,000 times as much energy as producing an equivalent amount of tap water.
  4. Most bottles are thrown away after a single use. In the U.S., less than 1/3 are collected  for recycling, even though the plastic in bottles is easy and efficient to recycle. Most plastic waste makes it to recycling facilities or garbage dumps, but a lot ends up in our rivers and lakes.
  5. Eight million tons of plastic end up in the ocean every year globally. (As much as 100 million tons of plastic is already floating there, with nearly 1/2 of that from China, Indonesia, the Philippines, and Vietnam).
  6. Environmentalists suggest cutting off the supply at the source now–through better recycling and drinking less bottled water.

In Supplement 5, we discuss sustainability as a matter of corporate social responsibility (CSR). But here is a fun 3-minute on-line quiz designed to measure an individual’s measure of bottled water consumption and social responsibility: nytimes.com/science.

Guest Post: Learning from Bangladesh – The Socially Responsible Supply Chain

andreas_wielandrobert hanfieldToday’s Guest Post today comes from 2 researchers in the SCM field, Andreas Wieland (left) at Berlin Technical U. and Robert Handfield at N. Carolina State U. 

Two recent disasters in the garment industry, the Tazreen Fashions fire and the Rana Plaza building collapse, have caused outrage over the lack of social responsibility across global supply chains. As we discuss in our new article in Supply Chain Management Review, “The Socially Responsible Supply Chain: An Imperative for Global Corporations,” integrating social responsibility into a supply chain strategy is not easy. Because of the emphasis on cost efficiency and supply assurance as the basis for supply chain strategy, other targets like focusing on social aspects have often been ignored. This is made even more challenging by the fact that customers are often unwilling to pay more for socially responsible products. Using this rubric, sourcing from regions with the lowest possible labor costs has been the most important criterion for Western retailers when selecting suppliers. Social responsibility not only competes with cost efficiency, but also with other targets such as customer requirements and flexibility.

There are three core principles that are essential for ensuring socially responsible business practices and successfully managing the extended global supply chain. First, a program to audit both products and suppliers (beyond tier-1 suppliers) needs to be implemented. Second, visibility (perhaps using smart technologies) is important for those categories of supply that cannot be directly controlled. Finally, collaboration is needed to successfully managing a socially responsible supply chain; this includes collaboration across the industry–and with local partners.

An excellent example of these principles in action is an approach adopted by the Swiss clothing manufacturer, Switcher. Each garment bears its individual Respect Code, a number sewn into each product, along with the Code’s web address. This code can be used by the customer to find online information about the product’s supply chain, including social and ecological information of each plant. Using the code, consumers may learn that production of a certain jacket took place in Portugal, that the plant is ISO 14001 certified, and that the CO2 footprint is 7.6 kg. Consumers can also see when the plant was last audited.

It is time to become serious about socially responsible supply chain management.

OM in the News: Apple Releases Names of Suppliers and Their Compliance

Apple Inc. just released an audit of its major suppliers, saying it found a number of violations including breaches in pay, benefits, and environmental conditions, especially in China. It conducted 229 audits last year, an increase of 80% over 2010. The company, notorious for keeping its supply chain under wraps, also for the 1st time named its major suppliers. Under pressure from activists in the US and abroad, Apple’s 27 page Social Responsibility Report  is the most comprehensive in the firm’s history. It also reflects new CEO Tim Cook’s  departure from the culture of secrecy maintained under Steve Jobs.

Asking your students to read this report and evaluate the firm’s strength and weaknesses may make for a good discussion when you cover Chapters 7 and 11.

The Wall Street Journal (Jan.14, 2012) reports that nearly a third of Apple’s suppliers do not abide by the company’s standards. Five  facilities employed underage workers;  112 were not properly dealing with hazardous chemicals (137 workers were seriously injured cleaning iPad screens with n-hexane); 108 firms did not pay properly for overtime; and 93 had workers exceeding the 60 hour per week corporate cap. Apple did add that all suppliers have stopped discriminatory screenings for medical conditions or pregnancy. Several references are made to one of Apple’s biggest manufacturing partners, Foxconn, and the spate of employee suicides (jumping off the roof) at its Shenzen, China facility.

While Apple has occasionally divulged the names of selected suppliers, the rest have been a secret, long-studied and sought out by industry analysts. The new list of 156 companies represents 97% of the first tier of Apple’s supply chain. It includes such well-known firms as Sony and Intel, along with less-known names like Tianjin Lishen Battery, Zenya Aluminum, and Unisteel Technologies.

Discussion questions:

1. Why did Apple release this report and name its suppliers?

2. What more can Apple do to increase its social responsibility?