High Tech & Electronics Industry: Sustainability Industry Report Spring 2013
Executive Summary
The high tech and electronics industrial sector has seen increasing in recent years demand for their goods and services due to the rising consumption in several developing countries as well as due the growth in cloud computing. This increase in overall demand is certainly adding more risk to the sustainability of this supply chain. With no uniform environmental and labor laws governing this supply chain, it is very critical for companies in a leadership position to take proactive measures to monitor their suppliers and ensure sustainability of their supply chains in the long run.
There are also new trends such as cloud computing that are changing the landscape of the computer industry. Companies in the computer industry are setting up huge data centers across the world to support their cloud computing needs and this is putting increased focus on the energy consumption at these data centers. Several companies have taken a leadership position in using renewable energy sources such as solar and wind to power their data centers as part of their sustainability initiatives.
We also came across several new initiatives that will be reshaping supply chains in the future. One such initiative is the small business supplier connection portal that is being supported by several leading companies in the high tech and electronics sectors. By using such collaborative platforms, the efficiency of the supply chain can be improved across the board. These kinds of initiatives will become critical to maintaining sustainable supply chains.
The hyper competition in the high tech and electronics industry sector coupled with a global supply chain and shortening product lifecycles, is putting increasing pressure on many companies to maximize profits at all costs. This can lead to some companies favoring profits over sustainability as described in “the tragedy of the commons”. Hence, to level the playing field for all and to provide companies with added incentive to focus on sustainability initiatives, we would recommend a minimum set of global regulations for sustainability that can be meaningfully enforced.
Methodology and Rating System
The framework incorporates assessment about supplier relationship management (SRM), supply chain management, LHR (labor and human right risk) and sustainability. Each indicator is ranked from 1 to 5 (the worst to the best) according to the result of group discussion.