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Information article and authorThis is a reflection of the Supply Chain Management Review of SonaliRammohan “Toward aMore R...
big organization with needs loads of time to research and then to convince the suppliers,which leads to high costs for a c...
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Review the hp story

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Review the hp story

  1. 1. Information article and authorThis is a reflection of the Supply Chain Management Review of SonaliRammohan “Toward aMore Responsible Supply Chain: The HP Story”, SCMR July/August 2009, page 34-41.SonaliRammohan is an Assistant Director at the Stanford Socially and EnvironmentallyResponsible Supply Chain (SER) Program. IntroductionIn the supply chain management review „Toward a More Responsible Supply Chain: The HPStory“, the author SonaliRammohan characterizes the work of HPs Social and EnvironmentalResponsibility program, how it could be implemented in companies supply chains and what itshould aiming on.Referring tothe author, in many supply chains workers are faced with cruel conditions.Because of longer supply chains nowadays, the issue about maintaining more responsibilitywithin them is getting more important.HP, an electronically company, developed a program to improve these conditions, with theaim to achieve long-lasting changes. Since this program is active, things changed but it is stillchallenging to implement its ideas in the every market. According to Rammohan, there are,for instance, still problems to push these changes upstream that means a lack ofcommunication between two suppliers within the supply chain. Nevertheless, the program issucceeding, not only because of he program, but also because responsibility gets moredemanded on customer sides.HPs work according to responsible supply chains, are highly demanded and provide trainingprogram for suppliers, for instance, to interact with several stakeholders to reach positivechange or forging new partnerships to achieve long-lasting improvements.Furthermore, the author gives on the basis of HPs work additional approaches how to speedup the success of their program. To convince companies that the SER program will not onlyimprove working condition, but also their outcome, so that this program could provide a win-win situation forthe firm.Rammohan provides the reader also with a forecast about which steps must still be made tomaintain and reach capabilities of building long-lasting changes for a stable and responsiblesupply chain. EvaluationHewlett Packard’s found in Chinese suppliers employees working under very bad conditions.“… factory workers were taking turns using the same dormitory bed – one person slept whilethe other worked.” According to Rammohan HP prefers to resolve the issues and preserve therelationship with the suppliers instead of dropping them. Rammohan supports her statement ina five-pronged program. She gives very good examples, which show that it was quite hard toconvince the suppliers to follow the program of SER. Apparently; managers thoughtemployees wanted to work as much as they can to earn more money. What the author doeswell in our opinion is she shows on senior managers how they thought before and how theythink after the SER program. However, we think she tries to argue only from one point ofview. Rammohan shows a lot of positive sides of the program; obviously it is positive to helpemployees work under better circumstances. But what we miss is the relation to other MNEs.How do they think about the program? Is really every company interested in such programs?In addition, she gives a very good example about the funds, “some suppliers think everythingwe ask for is going to involve a cost increase.” Actually, we do think the same way. SER is a
  2. 2. big organization with needs loads of time to research and then to convince the suppliers,which leads to high costs for a company. We would rather suggest dropping the suppliers andsearch for a supplier that treats the employees better.A question the review answers is how the program affected positively on the majornonconformances. According to the author SER achieved a lot of improvements, like in LatinAmerica has been improvements in injury and illness. HP wants to develop industry-wideSER standards, it might have several benefits such as sharing of resources and knowledge andengaging companies upstream can strengthen weak links in the supply chain. “… SACOMand Chicony report that they are starting to see greater trust between management andworkers.” So in the view of the author HP expects that suppliers represent 75% of itsprocurement spending will be using SER programs with their own suppliers. Further, HPwants to get partners with sub-tier suppliers. However, this step includes industry specifictraining session, what obviously means loads of money. The first thing we are wonderingabout is, where do you get all the money?Anyway, we are much more interested in anotherpoint of view. Rammohan is part of the SER and she shows all the good points and how theyaffected to five suppliers. For us it is still unclear what other companies do. Do they havesuch a similar organization, whichoccurs for the social and environmental responsibility? ConclusionWe think the article is rather weak according to such an important topic of human rights. Onone hand the author gives good reasons to join the SER. But she tells the whole story fromone point of view. I would be interested in other companies, what they do and how do theydeal with the problems of the suppliers. However, we have learned a lot out of the article. Weknow there is a company who is not just interested in own profit. HP wants to have a goodrelationship to all their suppliers and even to the suppliers of suppliers. But we still havequestions to ask the author.Questions 1. Do you think it is at the end more effective to invest heavily into suppliers to improve their working principles than just drop them? 2. Do you think that it is possible to vanish all irresponsible supply chains and in contrary establish a neutral organization like the WTO for the trade? 3. So we know how HP thinks and what they do. But what do other companies do to avoid violation of human rights? Or do they just do not care about the work environment of the suppliers and are only interested in own profits?

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