Chain of Thought

Ethical Supply Chains Ensure Their Own Survival

Managers of global supply chains have responsibilities as grand as their titles. Everything they do has regulatory, security and ethical implications. Even if they don’t have direct contact with supply chain partners in other countries, they’re responsible for the actions of whatever third party does have that contact. That’s why the wrong choice of supply chain partner can have a devastating effect not only on people, but on a company’s bottom line.

I’m blogging about these responsibilities because we just posted two articles on our website that address two separate but related aspects of global supply chain management. One talks about the U.S. Customs and Border Protection’s (CBP) Risk Assessment Process for managing an effective C-TPAT program. Customs-Trade Partnership Against Terrorism is a voluntary supply chain security program led by CBP to improve the security of private companies' supply chains. The other article outlines the need to avoid bribery of foreign officials anywhere along the supply chain, as prohibited by the U.S. Foreign Corrupt Practices Act (FCPA).  

What these articles have in common is their advice to be choosy about whom you do business with around the world. As we reported a couple years ago, freight forwarder Panalpina paid $82 million in judgments for violating the FCPA via dealings through third parties in several countries. And more recently, several U.S, retailers were put under the microscope for their dealings with suppliers who sourced from owners of those ill-fated factories in Bangladesh where workers lost their lives due to lax fire and safety standards.

This issue came up during MH&L’s recent Editorial Advisory Board Roundtable. Board member Joe Andraski, founder of Collaborative Energizer LLC, said he has been researching the Bangladesh situation and noted that it was fraught with moral red flags.

“The lack of concern for safety in the way products are manufactured there and how they are used was one thing, but when you look at the monthly wages being paid to factory workers there, it is not enough to support a family of four,” he said. “With this emphasis on safety and changing manufacturing rules, the cost of manufacturing in Bangladesh and other countries is going to increase dramatically and have an impact on reshoring decisions.”

Take a look at these online exclusives with your own supply chain in mind and see if you spot any vulnerabilities—not only for your company, but for the people who either directly or indirectly work in your chain.

 

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