Beyond Monitoring: Building a Sustainable Supply Chain in China

Thursday, August 9, 2007 0:39

Business or Social Responsibility has come out with an excellent 20 page brief entitled Beyond Monitoring (PDF download here).

A very timely piece, the article does an excellent job of showing the reader the various angles and approaches that a company must take in building a sustainable supply chain… something Mattel Toys did years ago, something RC2 wished they had done, and something you should be looking at as you assess your supply chain risks

“Beyond Monitoring” presents a four-part approach that is designed to address the root causes of social and environmental shortcomings in global
supply chains. Our objective in producing this paper is to encourage companies to remake strategies, redeploy resources and consider new partnerships in pursuit of a model that has the potential to achieve more lasting change. The approach we are advocating integrates labor and environmental considerations more fully into companies’ procurement efforts. It also seeks to re-emphasize the roles of two often overlooked constituencies, workers and governments, who should be more fully at the center of sustainable supply chain management.

Now, before readers dismiss me as a Treehugger (you wouldn’t be wrong), I believe that it is in the long term best interest of every firm manufacturing or sourcing in China to read this.

And the reason is simple. The firms that have spent the time building in the various elements of CSR (corporate social responsibility) and sustainability into the supply chains have been the most successful in China.

Bar None, GE, Intel, Amway, Dell, Nike, and others have become models for supply chain in China as they have invested time, money, and other resources to evaluate their supply chains from every angle, and then build.

They drive costs down through this process further than cutting corners, they have fewer IP issues (because employees have respect for their firm), their brand image is improved (GE ecoimagination is a sell point, and they only lost one aircraft engine deal in China last year), and HR hiring/ retention is much easier as potential employees are attracted to firms that are seen as part of the community.

I have seen this as part of my 3 years as the Vice Chair for the American Chamber of Commerce CSR Committee, I have seen this in studies conducted by my friends at AC Nielsen, I have seen this while project managing the AMCHAM Make a Difference Day, and more importantly I have seen this as part of my daily work at China SDP.

With that, there is an overview of the document, and after you read the overview you can find the full report here:

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If you have been looking at sustainable practices in relation to your supply chain share your thoughts. What were the hurdles? What were the gains?

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