Global Supply Chain Conference: Leaving Labor Out of the Equation?

By: Liz Umlas | Monday, January 14th, 2008

From within the world of SRI, one gets the impression that a key aspect of global supply chain management is how to uphold and improve labor standards for workers producing the things that you and I use every day.

Human rights groups, labor unions, social investors, international organizations, academics and a number of companies have spent years on this question, and there are now annual conferences devoted entirely to labor rights in supply chain production.

So when I came across a brochure recently for the upcoming Tenth Annual European Supply Chain & Logistics Summit 2008, to be held in Germany in May, I was surprised to find almost no mention of labor standards. I was even more taken aback when I saw that scheduled speakers include company representatives from industries, such as technology and electronics, that have been hit by allegations of supply chain labor violations.

Other sectors represented include food and beverages, retail, and automotive; industries that have historically had supply chain labor rights problems. But the conference is also aimed at sectors that need to learn more about this area, including pharmaceuticals, manufacturing, telecommunications, and yes, financial services.

There is one 35-minute session, over the course of three days, that covers “Integrating Ethics Into Your Supply Chain: Corporate Responsibility”. And there is one other relevant but tiny mention in the 7-page brochure: in the nomination categories for the annual supply chain award, the “Social Responsibility Award” is mentioned as one of ten categories in which nominees for supply chain excellence can distinguish themselves.

On the bright side, there are three whole sessions on environmental concerns in the supply chain, and one session each on patient safety and healthy food.

To the criticism that labor rights seem almost invisible on the agenda, the planners might respond that the conference is, after all, aimed at people in logistics, operations, inventory, purchasing and procurement, not those in the labor compliance or CSR divisions. But that is precisely the point. Cutting edge thinking on supply chain labor rights is that some of the most serious problems are embedded in companies’ own decisions and actions, such as their purchasing practices.

The idea is that, without better integration of the buyers and logistics folks on the one hand with the folks who oversee labor rights protection on the other – or, more radically, without rethinking how to better integrate factory workers and trade unions into the supply chain labor rights equation, as global textile union leader Neil Kearney has argued forcefully – we will not succeed in figuring out how to uphold these rights.

Perhaps this conference will cover some aspects of this question within its sessions on “risk management” or how to “build effective relationships” with suppliers. But from studying the agenda, it doesn’t seem a good bet.

As long as high-profile conferences purporting to bring together “leading senior level” supply chain executives leave labor standards largely out of the equation, their claims to “debate the key issues” and offer the “latest best practice” in supply chain management will continue to ring hollow.

1 Comment »

  1. Very important points, Liz - until companies in electronics (and elsewhere) themselves integrate social considerations into their business decisions (ie sourcing, procurement) then they won’t rid themselves of the significant risk of labor problems in their contracted factories. The Conference agenda as you describe it illustrates the prevailing view that business happens first in the usual ways, and then companies control for social risk after the fact. That’s not only ineffective, but inefficient and a waste of money.
    Interestingly, in Verite’s experience the employees who are responsible for supply chain management in many companies very much want tools and knowledge by which to integrate social considerations into their business decisions. We’ve conducted training on this topic for people from operations, procurement, quality, supply chain, etc in electronics manufacturers that have opened new possibilities for them.

    Comment by Dan Viederman — January 15, 2008 @ 4:57 pm

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