Sunday, September 22, 2013

Supply Chain Networks: Anonymity, Corruption, and Conflict Minerals

After reading "Supply Chain for iPhone  Highlights Costs in China", which mentioned the low wages and the long workdays/weeks of Chinese workers, I was reminded of other controversial practices in electronic manufacturer's supply chains. One practice that came to mind was the use of conflict minerals, specifically coltan, in electronic supply chains. Coltan and other conflict minerals are integral to cellphones, laptops, and nearly all mobile devices that hold an electronic charge. The Democratic Republic of the Congo has 70% of the world's coltan reserves, which have helped to fuel a civil war in the DRC. Procuring coltan also leads to the use of child workers in mines.

Because of this, the Enough Project has created a list of company ratings based on their supply chain's use of conflict minerals. The list codifies companies by using red, yellow, and green indicators.  Green companies have taken proactive steps to trace and audit their supply chains, advocated for some legislation, exercised leadership in industry-wide efforts, and have started to help the Congo develop a clean trade. Yellow companies have taken some steps to investigate their supply chains and are members of industry-wide efforts. Finally, red companies have done almost nothing to change their practices. Green companies include: Apple, Dell, Intel, and Microsoft. Yellow companies include: Samsung, LG, Toshiba, and IBM. Red companies include HTC, Nikon, and Nitendo. These are just a few companies I chose to highlight; the list is much longer and can viewed here.

The supply chain for these minerals is hard to track, since they are often smuggled across borders and then smelted with other minerals from around the world prior to shipping. This video goes into depth about how the chain itself works and it's effects on the Congolese.

When looking at the list, I began to consider the reasoning behind where each company falls. It seems to me that many American companies are ranked higher than foreign companies. I'm wondering if any other explanations are available? Perhaps market share, or age of the company also play an important role?


Company Rankings:



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