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Supply Chain
- 4. MANAGING SUPPLY CHAINS Increasing Complexity • Globally distributed supplier networks Decreasing to information •Right information = Informed decision Higher quality faster BUT at a lower cost •New competitors
- 6. FOXCONN CRISIS • In 2010, eighteen Foxconn workers attempted suicide. • Workers experienced long hours & low pay • Public criticized Apple-Foxconn relationship • Apple’s response – Inspection by Fair Labor Association • Reach out to media to provide transparency to public • Raise wages • Less overtime working hours
- 7. ACTIVITY TIME • Break into groups (4 people per group) • Come up with your own company • What is your product? • What are 3 values your company will stand for? • Now take your company overseas • In which country are you going to set up your manufacturing and why? • Let’s Share our Companies!
- 8. UH OH… • After many years of success, your company is under- fire. Put yourself in the position of Apple's CEO and your manufacturing supplier is Foxconn : • What is your plan now? (Based on your values) • 3 steps you would take • Let's share
- 9. DISCUSSION • Is globalization good or bad for local employees, firms and developing countries? • Consumers pay little cost for products, then why should the company bear the loss of manufacturing their products in ethically acceptable conditions? • To what extent a firm's operations in overseas countries should be judged by the home country's moral, ethical policies and standards?
- 10. FINAL TAKE • Firms should provide financial incentives for suppliers to support their cost and conduct. • Punishment for transgressors. • Implementation of new ethical strategies to create a safer and more inhabitable working environment for employees.
Editor's Notes
- The supply chain is the network created amongst different companies producing, handling and/or distributing a specific product. Specifically, the supply chain encompasses the steps it takes to get a good or service from the supplier to the customer. Supply chain- Most manufacturers use 3rd- party suppliers often providing critical parts or services to reduce the cost of doing business. These global supply chains can help manufacturers increase competitiveness and efficiency, but they also increase risk. /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-parent:""; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin:0in; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:12.0pt; font-family:Calibri; mso-ascii-font-family:Calibri; mso-ascii-theme-font:minor-latin; mso-hansi-font-family:Calibri; mso-hansi-theme-font:minor-latin;}
- -Pascal Lamy, chief of WTO (World Trade Organization)- Made in world over Made in America or Made in China. -Firms can locate operations around the globe to make most business/profit. -Distribution logistics; more convenient -Efficiencies – lower costs & fewer regulations -Audit system in developing countries -Firms incentivize suppliers to minimize cost Backlash of globalization- No jobs for domestic employees. Massive shift in production logistics – US makes 3% of clothing down from 50% in 1990. Human right abuses in overseas sweatshops. The International Labor Organization –child workforce between 5 years to 14 year olds.
- Earlier products were manufactured at a single location but now products are "assembled" using components often outsourced. There are three major factors that impact supply chain risk: Increasing supply chain complexity, decreasing access to information and greater need for higher quality faster, all for a lower cost. The ability to anticipate and address risk effectively has been severely handicapped by complexity. Now that manufacturers are outsourcing more work to suppliers across the globe and are managing second and third tier suppliers, it has become difficult to track, trace and monitor production. If the proper communication and collaboration systems aren’t implemented, a lack of data correlates directly to an increase in risk. When organizations don’t have the right information to make an informed decision, a higher level of risk exists that an undesirable outcome will occur.
- The best electronics in the world are made most efficiently in Asia. Foxconn, a Taiwanese multinational electronics contract manufacturing company . It is the World's largest electronics contract manufacturer and the third-largest infromation technology company by revenue. Foxconn make Apple's products well and efficient. Foxconn, as we know is facing difficulty with their practices. We have seen videos in previous classes about the hardships of the Chinese employees and even attempted suicides and harsh working conditions.
- 2 MINS OF ACTIVITY 1 MIN OF SHARING
- 2 MINS OF ACTIVITY 1 MIN OF SHARING
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- 3 MINS OR LESS Sweatshops are bad for whom, for the home market or for developing countries' workers who need jobs?