Apple’s Supply Chain – There are Human Costs, Too

From The Verge – Latest audit on two Chinese Apple suppliers finds labor, health violations: 

Worker in Apple’s Supply Chain

“If companies want to do business with us, they must uphold the highest commitment to human rights.” – Apple

When managing a supply chain as massive as Apple’s, company executives must be aware of the impact that its sourcing can have on certain locations and those who live in said communities. If firms fail to engage in humane business practices – as is noted in the text – their image of a company can be tarnished, or even destroyed. Over the past few years, Apple has come under intense scrutiny regarding the working conditions of factories in its supply chain. While Apple has gone to great lengths to regulate how its suppliers treat their employees, infractions remain.

According to a recent report (as described in my article), Audits continue to find infractions in the way Apple’s suppliers treat their employees. The Fair Labor Association, which Apple is a member of, found issues relating to “excessive overtime, underpayment of sick wages, and inadequate health and safety measures.” While Apple claims it closely tracks weekly labor hours, it is clear that many suppliers continue to overwork some of their employees. 

Firms must consider the human impact of their supply chain when they discuss and determine SCM planning and execution. They should also use analytics to track the well being of  those in their supply chain.

Discussion Questions: 

1. What impact can poor working conditions have on supply chain execution and performance? How would supply chain analytics help track this correlation?

2. Can supply chain planning (SCP) have an impact on the working conditions of employees? Why or why not?

3. Are large companies, such as Apple, responsible for the working conditions in factories, of their supply chain, which they do not own?