What smart companies can learn from Apple's supply chain woes

Mar 29, 2011

With growing public concern over worker suicides and injuries at Apple suppliers over the last two years, many companies are taking the wrong approach to managing their supply chains, says a new research study conducted by the Network for Business Sustainability, an independent research group based at the Richard Ivey School of Business, University of Western Ontario.

Following a review of 25 years’ worth of academic and industry research, the study revealed that ensuring safe, supportive working conditions is the top issue for companies that buy from suppliers in other countries. However, the report found many of the companies trying to improve working conditions and environmental impacts in their supply chains are going about it the wrong way.

Stephen Brammer of the Warwick Business School (U.K.) conducted the study with co-authors Andrew Millington and Stefan Hoejmose of the University of Bath’s School of Management. Ivey professor Robert Klassen helped oversee the report. Ivey professor Tima Bansal is the executive director of the Network for Business .

“Many companies today talk about developing ‘sustainable’ supply chains, but they’re actually talking about managing risk and preventing public relations crises,” Brammer says. “Those companies end up implementing costly and ineffective punitive actions against suppliers after labour issues or supply disruptions have already occurred.

“In the end, nobody wins.”

The study found leading companies think about their supply chains as opportunities for competitive advantage. Those companies work proactively and collaboratively with suppliers to monitor their progress and help them improve.

“If supplier employees are experiencing high levels of injury, your company should send staff to do on-site training. If some suppliers are less productive than others, don’t just drop them. Hold supplier conferences where the laggards can learn from the leaders and everyone can share best practices," Brammer says.

Researchers hope their study helps executives and procurement professionals rethink their current strategy and see the potential benefits rather than just the prospective risks.

Explore further: Entrepreneurs to venture capitalists: Don't be a Scrooge

Provided by University of Western Ontario

not rated yet
add to favorites email to friend print save as pdf

Related Stories

UK goods: 'Not made in Britain'

Feb 08, 2011

British owned firms, says The University of Manchester based ESRC Centre for Socio-Cultural Change (CRESC), employ an average of 14 workers and are mainly too small to export their goods.

Study finds 'masculine' women get more promotions at work

Jan 27, 2011

Women who demonstrate stereotypical masculine traits should be mindful of their behavior if they want to get ahead in the workplace. That is the finding of researchers at George Mason University and Stanford University who ...

Recommended for you

Over-identifying restrictions in economic analysis

Nov 25, 2014

The analysis of empirical economics has long made use of a tool called the generalized method of moments (GMM). This method is used as a generic way of estimating parameters in an empirical model where the ...

Tracking Chinese aid to Africa

Nov 24, 2014

Is a fancy new school in an African government official's hometown a coincidence, or evidence of systematic favouritism in the distribution of aid?

User comments : 0

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.