Time for a New Approach to Supply Chains
5th January 2017 | John Manners-Bell
John Manners-Bell, author of Supply Chain Ethics, introduces ethical concerns that come into the supply chain
The relationship between public policy makers, lobbyists and the logistics and supply industry has been characterized by years of division and mistrust. Anti-globalization campaigners (including those campaigning against the present TTIP negotiations) have ignored the economic benefits which have seen many millions of people across the emerging world lifted out of poverty. Meanwhile, many multinationals have sought to avoid their environmental and social obligations by turning a blind eye to the often degrading and dangerous conditions in which the employees of their remote suppliers work. Governments, meanwhile, have sought to influence industrial strategy through regulation and compulsion, although in many cases their thinking has not kept pace with the development of new ways of doing business and has been out-of-step with economic reality.
All sides, with a few notable exceptions, have been guilty of a blinkered approach to developing public policy and corporate strategy. The issues are much more finely nuanced than many politicians would have us believe and require a sophisticated response. Likewise, managers must recognize that the long-term health of their businesses relies on sustainable environmental and social strategies.
A number of artificial choices have been created which no longer make any environmental, societal or economic sense. For example, despite the best efforts of policy makers that use all the fiscal tools available to them, economic growth has not been decoupled from road freight output. It may indeed be better for authorities to embrace the ‘sharing economy’ which has the potential to improve the present poor utilization of transport assets. Companies such as Uber and Amazon could, indirectly and unconsciously, achieve more environmental benefits through new business models and technologies than decades of public policy. However, this will rely on the light touch of regulation rather than the entrenchment of vested interests through government support and protection.
Those in charge of public policy as much as those running businesses must realize that positive economic, environmental and societal outcomes are achieved through a wholly integrated business strategy. Nowhere are these outcomes more evident than in modern supply chains. Companies are increasingly aware that their businesses are severely at risk from operational disruption and reputational harm if they are not able to identify threats within their outsourced supply chain. If their suppliers are acting unethically towards their employees or undertaking practices which lead to the pollution of the environment, the consequences to the ‘economic owner’ of the supply chain can be severe. A number of global retailers found this out to their cost following the disaster at the Rana Plaza industrial complex in Bangladesh.
My latest book, Supply Chain Ethics, argues the case throughout for a more integrated approach to solving the challenges facing regulators and the business community. It details the latest thinking on the ‘triple advantage’ of combining ethical, environmental and profit-driven strategies demonstrating that they cannot be implemented in isolation from one another. In addition, it provides a guide to implementing a successful corporate and social responsibility plan and highlights best practice, including case studies of those companies which have succeeded as well as those which have failed and suffered the cosequences.
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