Electronic components without hazardous materials? Check. Factories that recycle water and reduce the carbon footprint? Check. Cargo protected against terrorist plots? Check. Confirmation that my supply chain and supply chain partners do not engage in slave labor or human trafficking? Huh? Yup. That could be a new job for high-tech supply chain executives, too.
Although this last issue is something many companies have had to confront as the public becomes more aware of these practices, a bill recently approved by the California Senate and Assembly and awaiting Gov. Arnold Schwarzenegger’s approval or veto puts it back on the radar.
If signed, about 3,200 global companies — predominately retailers and manufacturers — with revenues of more than $100 million would be required to publicly disclose on their Website policies they have in place to ensure that their supply chains are free of slavery and human trafficking activities.
Regardless of the specific outcome of this one bill and the effect it could have on the global electronics industry, companies can’t ignore the bright red warning flag being waved: Consumers want businesses to prove they are good citizens.
As noted in a recent column by Elizabeth Moss Kanter in the Harvard Business Review , companies and executives will be held accountable for how they instill end-to-end responsibility into their supply chains and how their actions affect society’s well-being over the long term.
Apparently, in a trend gaining greater momentum every year, consumers, environmentalists, and government regulators have lost tolerance for finger-pointing blame tactics and demand corporate stewardship.
Of course, it’s reasonable to expect companies to be responsible entities. Boardroom decisions clearly influence more than one company’s bottom line. Companies should monitor how their operations hurt or help the world, and take a leadership position in fixing potentially harmful shortcomings.
I do wonder, though, how the electronics supply chain will keep pace with the amount of social change that appears to be surfacing worldwide. These shifts, which will come to life through grassroots activism, newly adopted laws, or collective business resourcefulness, could push supply chain limits even further and, undoubtedly, make the entire process more complex.
Perhaps, a way to manage this lies in further evolving already-deployed end-to-end supply chain transparency tools. Not long ago, many companies latched on to the idea of end-to-end supply chain transparency: the profound need to know exactly which products were in the pipeline (from suppliers’ suppliers to customers’ customers) at any given moment.
To achieve this, companies spent fortunes on IT systems designed to link global business partners and time-critical information in a dynamic way. Logically, the theory held that companies would analyze this data and use it to better manage uncertain supply and demand fluctuations, control inventory letters, and boost their supply chain’s responsiveness to changing market conditions.
Maybe it’s a stretch, but if, hypothetically, all this supply chain information now resides somewhere and follow-the-sun productivity conversations are the norm, couldn’t supply chain executives extend those capabilities to be more socially conscious? I don’t know the answer to that question. But, I’d like to think that those million-dollar systems could do more than shuffle parts from one facility to another.
What do you think? What’s your company doing to influence end-to-end supply chain responsibility?