OM in the News: Still Outsourcing to Bangladesh

It has been 5 years since the 2013 garment factory collapse in Bangladesh that killed 1,134 people and left over 2,500  injured. The Rana Plaza factory building was expanded illegally, with extra floors stacked one on top of another. An engineer had declared it unsafe, and the thousands of people who worked inside, stitching garments for clothing brands from around the world, knew it was trouble. The tragedy focused international attention on Bangladesh’s role as the world’s second-largest garment producer, and led the government and manufacturing associations to promise big improvements.

Many of the world’s top clothing brands said they would stop contracting with factories if they failed to improve safety for their workers. European and U.S. brands set up programs meant to improve safety. Five years later, the situation is complicated, and factories overseen by the government and subcontractors remain at risk. About 3,000 of the country’s 7,000 factories are still exposed to life-threatening risks, ranging from a lack of fire safety equipment to serious structural flaws, reports The New York Times (April 24, 2018). The dangerous factories, often small, sometimes subcontract work from larger factories that deal with foreign brands. Textile exports are a huge business for Bangladesh, bringing in $28 billion annually, mostly from Europe and the U.S.

Under new programs, some 2,300 factories have been inspected and many have upgraded their safety standards. Industry insiders guardedly admit that subcontracting remains a problem, since larger businesses sometimes contract some work out to smaller, less-safe factories. This issue of outsourcing (Chapter 2) remains controversial to Westerners, who want inexpensive clothing, but ethically produced.

Classroom discussion questions:
1. What is the responsibility of Western firms whose manufacturing takes place in countries like Vietnam, Ethiopia, or Bangladesh?

2. What was the agreement reached shortly after the collapse?

OM in the News: Worker at Volkswagen Plant Killed By Robot

robot A technician was killed by a robot at a VW plant in Germany yesterday, reports The Financial Times (July 2, 2015), in a rare accident that touches on concerns about the spread of automation and its impact on jobs. The 21-year-old was installing the machine when he was struck in the chest by the equipment and pressed against a metal plate. The fatality comes as concerns spread about the effects of automation, including fears about whether robots can be controlled when they become more intelligent than humans.

Deaths in factories caused by automated equipment date back decades, but robot-related fatalities are rare as heavy robots are kept behind safety cages to prevent accidental contact with humans. In this incident, the worker was standing inside the safety cage when the accident occurred. VW said the robot did not suffer a technical defect. The machine was not one of the new generation of lightweight collaborative robots that car manufacturers are installing to work alongside workers. Collaborative robots do not have a safety cage but their force and speed can be limited by the way they are built. They also have sensors to detect human movement. Some are also designed to stop if a human gets too close.

VW said last year it planned to use more robots to cope with a shortage of new workers as baby boomers retire in coming years. These robots would take over monotonous tasks, while humans would focus on more highly skilled jobs. The car industry has by far the highest density of robots, but such automation is increasing rapidly in other industries as their cost falls and capabilities increase.

Fatality rates in manufacturing are below the average for the economy as a whole, and have been falling as automation has increased. There were 2.1 fatal injuries for every 100,000 full-time equivalent employees in manufacturing in the US in 2013, down from 2.7 in 2006. (It is about 8 times more dangerous to work in a bar  where the fatality rate there is 16.4 deaths per 100,000 employees.)

Classroom discussion questions:

1. Why are robots an important part of production at VW?

2. What is a collaborative robot?

OM in the News: Workplace Safety and OSHA

When a fire broke out in 1911 at the Triangle Shirtwaist Factory in New York, 146 workers died. Many jumped from windows because the doors that could have saved their lives were locked to stop them from stealing. “In the ensuing century, workplaces have been transformed,” writes BusinessWeek (Dec. 14, 2014). Since Congress created the Occupational Safety and Health Administration in 1970, the U.S. workplace death rate has dropped 81 percent, saving half a million lives. Economic and technological changes have swept workers out of the most deadly jobs and into comparatively safer ones. New state and federal standards have outlawed corner-cutting that formerly killed employees, imposing costs on companies that don’t comply.

workplace safetyStill, deaths from workplace injuries in the U.S. averaged 13 a day in 2012, and the number of work-related deaths—counting illnesses such as lung cancer—may be 10 times as large. Work can be far more lethal in developing countries; witness the April 2013 collapse of a facility housing garment factories in Bangladesh, which killed eight times the number who died in the Triangle fire. In many parts of the world, workplace safety is an idea whose time is yet to come.

Classroom discussion questions:
1. Why is this an OM issue?

2. What is the relationship between ergonomics and workplace safety?