SUPPLY CHAIN RESOURCE COOPERATIVE

News of the increasing death toll in Bangladesh continues to pour in, with the latest at 600 found dead in the rubble of the Rama factory complex.  Demonstrators are protesting apparel offices (such as Gap’s offices in San Francisco) to demand better working conditions in Bangladesh factories.  But how easy is it for companies to turn off the flow of cheap labor?

This is a difficult set of decisions for apparel companies.  Some, like Disney and Nike, have announced that they simply won’t buy any apparel produced in Bangladesh.  But is that really the right solution?  Parliament members in Bangladesh, as well as the garment manufacturers in that country, are pleading with companies not to leave Bangladesh, noting that “the whole country should not be made to suffer.”  Fourteen million families depend on the jobs produced by the apparel industry, including women such as Shaheena, a single mother described in the New York Times article this morning.  Shaheena works to feed her young son, and left her husband who abused her for a job that would allow her to be independent and self-sufficient.  This job meant everything to her, and she was one of the hardest workers.  She, like many others, went in to work when cracks appeared in the building on the morning of the collapse.  Paid $100 a month, she needed the $25 that day in advance wages to pay her rent, which was about $38 a month.

The garment manufacturers ordered other workers to go in.  A big order was due for Benneton and Loblaws, who like other retail apparel manufacturers, worship the deity of perfect order fulfillment.  Get the production done on time, or penalties will result.  Translation:  get people in to work at all costs, even if it means sending them into an unsafe building that is about to collapse.

Viewed from the stoic perspective of supply chain excellence, the idea of getting orders completed on time in full is of course familiar to all students of the profession.  But what are the implications of such an order, when weighed against the lives of 600 people trying to make a living in one of the poorest countries in the world?  Is there a limit to the extremes companies will go to get low value clothing to store shelves?

Of course, executives will always publicly state yes, especially in hindsight.  But there will be other disasters that occur in emerging countries with poor infrastructure, unsafe or inhumane working conditions, and dangerous conditions.  Some companies are taking steps.  Officials from two nongovernment organizations, PVH (Phillips Van Heusen) and Tchibo Group from Germany, have signed on to a group that would ensure a broad plan to ensure fire and building safety in Bangladesh factories.  But this is not enough.  One company executive I spoke with stated it very succinctly:  “I can no longer be in this business if it means we are forced to work with suppliers who have the potential to destroy our business values and our brand.”  It is that simple.  The soul of the enterprise is directly represented by the values, integrity, and relationship an organization develops with its key suppliers.  So yes, your brand is at stake.  And it is high time that senior executives take on stronger measures to prevent the needless loss of human lives in places like Bangladesh.

So how do other companies rate when it comes to human rights and sustainable supply chains?  A group of 30 MBA students this semester decided to “stress-test” the supply chain code of conduct behaviors of major companies in the retail, aerospace, chemical, and other industries.  The sustainability reports for 2013 are found online.  The scoring mechanism found for these firms represent an impartial, objective view of the integrity of their supply chains, and how well they are driving standards into their supply base.  Read for yourself, and perhaps you can also make a difference.

3 Responses

  1. Anna Rzewnicki

    May 7, 2013 @ 3:22 pm

    Thanks for your remarks, Rob, and for sharing insight you’ve received from some in the industry. Thanks also to the students who chose to conduct those studies this semester.

  2. Anna Rzewnicki

    May 7, 2013 @ 3:30 pm

    Rob, Just got your note offline. Thanks for clarifying that labor and human rights are part of the coursework in your sustainable supply chain management course. Glad to hear that our MBA students are focusing attention on this important part of the global supply chain.

Continuing the Discussion

  1. Human Rights and Sustainable Supply Chains: How Do Companies Rate? | simplybusinessresearch

    May 7, 2013 @ 1:49 pm

    […] Supply Chain Resource Cooperative) at NC State University’s Poole College of Management, writes about the increasing death toll at the Rama factory complex in Bangladesh and the difficult realities and complexities that are […]



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