Thursday, February 2, 2012

How Should We Face the Phenomenon of “Double Standard” in Global SCM?

– A Second Thought on Apple’s 2012 Supplier Progress Report

In this week’s article, “Outcome Driven Supply Chains”, we discussed six supply chain outcomes that a successful supply chain manager need to take into consideration. They are: “Cost, Innovation, Sustainability, Responsiveness, Security, and Resilience”. The issue of sustainability caught my eye and reminded me some related problems in those global popular manufacture origins. For instance, maintaining sustainable development is always a hot slogan in China; however, the actually implementation is still taking a slow step.

Later in the weekend, I read a piece of recently released news about Apple’s 2012 Supplier Progress Report. It is said that Apple had conducted an internal audit on working conditions within all its alignments on how well its contractors were treating workers that making iPhones and iPads. Below is a chart showing the percentages of suppliers which passed or failed the audits across a number of labor related standards. (You could find this news by:

Source: Apple Supplier Progress Report 2012

Despite the justice and reliability for the results of this reports, or the uncertain scope of sampling population, the passing rate of 74% shows that Apple along with its parterres seems to maintain a good job. Also in this report, Apple claims that it is committed to driving the highest standards for social responsibility throughout their supply base, and it requires all its suppliers to “provide safe working conditions, treat workers with dignity and respect, and use environmentally responsible manufacturing processes wherever Apple products are made."

However, in practice, Apple still need to spend more effort to improve their Labor right (especially its working conditions) as well as their sustainability strategies in the developing countries like China, given the bad news in recent years. For example, Chinese environmental groups accused Apple Inc of turning a blind eye as its suppliers pollute the country in 2011. Not mention the famous worker suicides in 2010 that put Apple’s name at risk – as many as 18 employers killed themselves at an Apple assembly plant in China run by contract manufacturing giant Foxconn, leading people to question about how employees were being treated there.

As we all know, many of the world’s famous manufactures are distributing their plants and networks in different countries and multiple cities. Building manufacture centers and assembling plants in developing counties like China, Vietnam and Korea is a common practice in supply chain management. It is a good strategy to take the advantage of the cheap and massive labor productivity, large land, benefit policies for foreign companies and even sometimes, the weak guidance and non-strict laws.

Standing at the management side, it is true that as the plants spread all over the world and different parties involved, a company will find it harder and harder to guard and maintain its high standards and rules. For one thing, you can’t monitor what happens on the other side of the world. While on the other hand, it would be better to let the domestic management group keep an eye and make strategies considering the differences in culture and market needs.

However, should that be a strong excuse for a global manufacturer to have double standards? How should the supply chain manager balance the three A’s (Agility, Adaptability, and Alignment) principles? What strong measures could be used to avoid such messy problems both internal and external? Certainly, a research or an internal audit report is a good start, but far from enough.

Can you think of any successful examples or excellent strategies in existing companies? As the supply chain management is shifting to cross-enterprise in a global scope, I really hope we could discuss some good solutions and practical tactics in class.

Reference for news of Apple:

For the full version of Apple Supplier Progress Report 2012, please follow:


  1. It has been a big concern recently since a several bad news against Apple occurred in Foxconn.
    In my opinion, Foxconn also has its responsibility in this problem. With a large volume of order from Apple, it needs to expand itself and increases the efficiency in manufacturing. The policy of the government needs to protect the workers. In the other hand, I read on a newspaper that the salary of worker in Foxconn is higher than in other companies in the same industry.
    I think working overtime is mainly the cause of stress of worker in Foxconn. The management should consider to make the working time more flexible and Apple should do the audit more regularly.

    1. I agree that Foxconn also need to take the responsibility. However, it is Apple who requires such large amount of products and it didn't offer enough money for their suppliers' to make enough profit. When the lower lever suppliers are lack of fund, it is hard for them to guarantee safety and labor right. Still, if Apple want to maintain its "high standard" as it announced in public, some more direct methods need to be taken. For example, Apple could set up a fund to improve the working conditions. Apple should know the plant in China is a sweat plant and have their own monitor.


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