Tag Archive | Corporate Social Responsibility

The Ethical Shopper: A Myth?

It has often been assumed that one of the characteristics of SCM philosophy is “a customer focus to create unique and individualized sources of customer value, leading to customer satisfaction” (Mentzer et al., 2001). This assumption has led to business models like Primark, which aim to satisfy customer needs for fashion by making incredibly cheap garments available – so cheap that many teenagers nowadays are used to throw them away after just two weeks. Part of the truth is that such customer needs are not only satisfied by these businesses, but also created by the marketing experts that are part of the system. But to what extend can we expect that customers critically reflect the way they consume? A very interesting article by Michael Hobbes argues: “We’re still trying to eliminate sweatshops and child labor by buying right. But that’s not how the world works in 2015.” Hobbes’ article is titled The Myth of the Ethical Shopper. See also: Supply Chain Management and Corporate Social Responsibility.

G7 Summit: World Leaders Discuss Global Supply Chains

Expectations were low for the G7 Summit in Germany, which ended today. It is thus all the more surprising that the participants have agreed to phase out the use of fossil fuels by the end of the century. When asked about what he – besides climate targets – considers the most important result of the summit, one of the participants, the President of the European Commission, Jean-Claude Juncker, made a remarkable statement today on German TV: “Well, this might surprise you, as it is rarely reported on in the news: We had an in-depth discussion about supply chains. Surely, we cannot accept that we, in our part of Europe, wallow in wealth and, in the face of the global problems caused by social dumping, let others pick up the bill for our wealth. What we need are fair conditions everywhere: labor rights, environmental standards. And this is what we will be working on.” It seems that the world’s leaders have put supply chains on their priority list.

Citations of Excellence Awards 2014

Like every year (see my previous post), Emerald rewards authors of exceptional papers covered in its extensive Emerald Management Reviews database with a Citation of Excellence Award (full list). I went through the latest list of the Citations of Excellence Top 50 papers. This time, the list contains at least two papers from related disciplines that could be useful to influence the way we are conducting research in our field. The first paper by Kim, Ferrin & Rao (2008) presents a trust-based consumer decision-making model in electronic commerce. The results of the study show “that Internet consumers’ trust and perceived risk have strong impacts on their purchasing decisions”. The second paper by Locke, Qin & Brause (2007) asks: “Does monitoring improve labor standards?” The authors find that monitoring alone “appears to have produced only limited results”, but, when “monitoring efforts were combined with other interventions […], working conditions seem to have improved considerably”.

Kim, D., Ferrin, D., & Rao, H. (2008). A Trust-based Consumer Decision-making Model in Electronic Commerce: The Role of Trust, Perceived Risk, and Their Antecedents. Decision Support Systems, 44 (2), 544-564 DOI: 10.1016/j.dss.2007.07.001

Locke, R., Qin, F., & Brause, A. (2007). Does Monitoring Improve Labor Standards? Lessons from Nike. Industrial and Labor Relations Review, 61 (1), 3-31 digitalcommons.ilr.cornell.edu/ilrreview/vol61/iss1/1/

Personal Predictions for Supply Chain Management in 2015

Dear readers. I hope you enjoyed reading this blog in 2014. Based on dozens of discussions I had throughout the year, I would like to share my predictions for topics that could become important in supply chain management in 2015 with you. First, I believe that ethical issues will soon play a much more important role than ever, as, so far, social standards or animal rights have too often been neglected in our textbooks. Second, a supply chain consists of relationships between people, who work in teams and groups across independent companies. So, there might soon be a supplementation of the traditional view of the supply chain as a network of black boxes called “suppliers”, “buyers”, “consumers”. Finally, better technologies and algorithms, and, thus, lower transaction costs, might soon make the old SCM dream come true to integrate the end-to-end supply chain. We might soon see totally new business models (enterprise mobility linked to SCM could be a good example). I wish you a good start into 2015.

Are Apple’s Promises to Protect Workers Routinely Broken?

“Poor treatment of workers in Chinese factories which make Apple products has been discovered”, as BBC Panorama reports in an article. Is this just another example of the underside of global supply chains? Watch the video from the article.

Are your Supply Chains Tiger and Orang-Utan Friendly?

Accounting for roughly 40% of vegetable oil production, palm oil is the most important vegetable oil worldwide. As a key commodity, it is an ingredient of a large range of products, including processed food, cosmetics, shampoo, and soap. A recent Greenpeace report reveals how palm oil supply chains are pushing Sumatran tigers and orang-utans closer to extinction (pdf). It becomes evident “that the palm oil sector is currently the greatest single driver of deforestation in Indonesia, accounting for about a quarter of all forest loss”. The report demonstrates that palm oil supply chains “are aiding and abetting the clearance of the Bornean orang-utan’s rainforest habitat and that of the even scarcer, critically endangered Sumatran tiger” and that “[t]hey have also been complicit in peatland destruction and depriving communities of their land and livelihoods”. How can research in the field of supply chain management help to recognize the true costs of palm oil production?

Human Rights in the End-to-End Supply Chain

“Certification programs have their merits and their limitations. With the growing availability of social media, analytics tools, and supply chain data, a smarter set of solutions could soon be possible”, as Robert Handfield and I argue in our paper, just published in Supply Chain Management Review. We believe that an evolution from company thinking to supply chain thinking will now help to make businesses more socially responsible: “Traditional solutions that focus just on a brand (e.g., Company A) or the labels used with the brand (e.g., a label saying that Company A’s product is ‘fair’) are being supplemented by solutions that recognize a brand’s network (e.g., Company A’s upstream supply chain) and reveal how all entities of that network are treated (e.g., an interactive map of the supply chain on a smart device)”. This transformation requires costly data, but becomes realistic as transaction costs are increasingly reduced due to new technologies, standards, and algorithms.

Wieland, A., & Handfield, R.B. (2014). The Challenge of Ensuring Human Rights in the End-to-End Supply Chain. Supply Chain Management Review, 18 (6), 49-51

Vanilla Sourcing in Madagascar

In a previous post, I demonstrated how Symrise creates added value beyond corporate boundaries by closely collaborating with vanilla farmers in Madagascar. Watch the following video, which highlights this approach from the perspective of Unilever, a buyer of Symrise’s aromatic compounds. The case is also included in an article I have written for Supply Chain Management Review about the interface between SCM and CSR.

Rethinking Corporate Social Compliance in the Supply Chain

Managers are increasingly under pressure to ensure that their products bear attributes like “fair”, “ethical”, “green”, or “social”. Hereby, it becomes clear that solutions cannot just be found in the manager’s company, but in the company’s end-to-end supply chain. This has led companies to audit every company along their global supply chains against the own standards, which resulted in a large volume of auditing. The Rana Plaza building collapse, however, tragically showed that this top-down approach seems to fail. Departing from this observation, a new EY report, Human Rights and Professional Wrongs (pdf), provides an excellent summary of the problem and a set of recommendations for improvement. For example, the authors recommend to use third-party certifiers and auditors more strategically, to prevent orders from factories that have not had their status assessed, and to maintain longer relationships with a smaller number of suppliers. These recommendations could help to sharpen a blunt sword.

The Story of a Fair Mouse

If you believe that today’s post is about little rodents that behave equitably, then you have most probably not heard about NagerIT’s project to build fair computer mice. (Although the German term “nager” translates literally as “rodent”.) NagerIT took supply chain transparency to an extreme, disclosing the entire supply chain of their Fair Mouse (pdf) on their website, thereby highlighting suppliers with unknown details on working conditions. The Fair Mouse project reveals how difficult it can be to produce a product that is 100% fair: NagerIT admit that they stay with “the problem of the mining of the metals (except solder tin) and the assembly of the remaining components, which [they] still can not obtain from alternative (fair) suppliers”. However, a good start has already been made. The story of the Fair Mouse is, of course, a little like the story of the Fairphone, recently presented here by its founder.