Advertisement

Blog

The Future of the Supply Chain, Part 2

When an hour isn't long enough to say what you need to say, you've got a great topic on your hands. The future of the supply chain is one such topic.

China clearly plays a big role in that future, and the EBN Webinar Future of the Supply Chain: How to Remain Relevant in a Changing and Interconnected World spurred some discussion on that country. (The Webinar will be available on demand Monday.)

Corporate social responsibility is something many companies are trying to integrate into their supply chain practices. What are companies in the West doing to drive more positive changes in China? Pamela J. Gordon, founder and president of Technology Forecasters Inc., and Jeff Rangel, senior manager of corporate affairs at Brocade, cite California's new Transparency in Supply Chains Act. It requires companies with at least $100 million of gross receipts to regularly report the specific steps being taken to ensure their supply chains do not include contractors involved in illegal labor practices. (See: Transparency Law Creates Unease in Asia.)

The sheer size of the California market may be one incentive for Asia-based companies to improve worker conditions. Another incentive: OEMs are increasingly asking their supply chain partners about their labor policies and practices. To remain competitive in the global market, companies are going to have to pay close attention to the impact they have on society and the environment.

On a related topic, buyers of consumer electronics are increasingly considering the environment. Chris Ely, manager of industry analysis for the Consumer Electronics Association, said his group asked consumers the following question:

    Thinking about your next consumer electronics purchase, which may take place over the next few years, how important or unimportant would each of the following be to your decision to purchase a particular consumer electronics product?

Eighty-four percent of the respondents said the product's energy consumption would be either important or very important.

Please let us know what you think will shape the supply chain's future at editors@ebnonline.com.

14 comments on “The Future of the Supply Chain, Part 2

  1. Nemos
    November 17, 2011

    “do not include contractors involved in illegal labor practices” I believe that little steps and actions like that will lead us to a better supply chain and it will exclude opportunistic and bad companies. I hope also one day seeing a variety of different “made in” and not everything from one specific region.

  2. DataCrunch
    November 17, 2011

    Apple was struggling with this when the continuous news about the poor working conditions at Foxconn were being reported.  Apple has tried to put better auditing practices in the supply chain to help address this. 

  3. Anand
    November 18, 2011

    Barbara,

     Thanks for the post.  Its good see state of California taking such active measures to tackle illegal labor practices. But what about other states ? Do they have similar laws ? And what about those companies who have gross receipts less than 100$ million ?

  4. Anand
    November 18, 2011

      Apple has tried to put better auditing practices in the supply chain to help address this.  

    @Dave, you are right. Apple is not only trying to address the  poor working conditions at Foxconn but its  also trying actively to address the environmental concerns. Apple plans to hire a third-party auditing firm to investigate 15 of its Chinese suppliers in response to allegations that its suppliers are violating environmental regulations.

  5. Jay_Bond
    November 18, 2011
      Thinking about your next consumer electronics purchase, which may take place over the next few years, how important or unimportant would each of the following be to your decision to purchase a particular consumer electronics product?
      Other than cost being an issue, enery consumption is definitely going to be considered, particularly if the product is going to get used heavily.
  6. Nemos
    November 19, 2011

    “Apple has tried to put better auditing practices in the supply chain to help address this.”

     I hope so, Apple is the Leader right now it can show the way. Always, the leader is an example for the followers. However, don't forget that Apple has to improve the working environment also inside. Where the “fault” and the “wrong” for the employees is an unknown word.

  7. Himanshugupta
    November 21, 2011

    To give more transparency to the system and benefit to those companies who are actually working on improving the supply chain, governments can start certifying the companies just like they do for environmentally friendly companies.

  8. JADEN
    November 21, 2011

    “To remain competitive in the global market, companies are going to have to pay close attention to the impact they have on society and the environment”

    This has to be of positive impact on the global or local environment, community, society, or even economy.  That's a Sustainable business to ensure that all processes, products, and manufacturing activities adequately address environmental concerns while maintaing a profits.

  9. Houngbo_Hospice
    November 21, 2011

    “To remain competitive in the global market, companies are going to have to pay close attention to the impact they have on society and the environment”

    I agree, but some companies will find ways to bypass that by outcoursing their activities in countries that don't care about environmental issues.  In my opinoin, investors should make sure that comapanies they want to invest in have adequate sustainability and environmental policies. 

     

  10. Himanshugupta
    November 23, 2011

    for investors, quarterly return on investment is more important than anything else. When we talk about the corporate and social responsibility about environment then even if companies outsource their work to those countries where they can bypass the environmental laws but if the product that are imported or bought by nation or individual have strict environmental policy in place then the problem can be mitigated. 

  11. Damilare
    November 26, 2011

    Thanks for the nice article. 

    This century is has almost as much believers as there are sceptics in environmnent and sustainability. It is not surprising that the statistics is in the favor of reduced energy consumption for electronic products, considering the direct cost savings to the customers/consumers. The consumers are usually more motivated by financial gains than environmental gains. 

    However, I believe that the future consumers will be more motivated by the environmental credentials of a product because it is becoming increasingly fashionable to be environmentally 'correct' or 'aware'. Therefore the attendant effect on the supply chain will see companies with better environmental compliance becoming more competitive as they are driven by consumer choices. 

  12. FLYINGSCOT
    November 27, 2011

    I hear a lot of talk these days of thinking more locally which ranges from sourcing local produce to commuting less to work.  I like this trend but struggle a tad to see how this will apply to high tech items where the complex manufacturing infrastructure is difficult to set up in every locale.

  13. Damilare
    November 27, 2011

    As with every great new ideology, the localism idea requires a lot of debate and refinement. It will take time and contributions from several fine minds. I personally believe the should be quantitative work done on what could be considered as local and at what different scales and distances in order to balance economics of scale.

    For example, if two states cooperate to set up a manufacturing company on the boundary line between the two states, this can be considered local to both states while accounting for economics of scale as well….

  14. Eldredge
    November 28, 2011

    More and more with today's electronics, I think of portabilty … which makes energy consumption a critical issue from a practical viewpoint. I would want to have a device with long battery life and infrequent charging requirements. I think further developments in battery life and size/weight reduction will have significant impacts.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.