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CEO Scrutinizing Apple's Supply Chain

By APICS CEO Abe Eshkenazi, CSCP, CPA, CAE | 0 | 0 | April 06, 2012

Apple CEO Timothy Cook is using his supply chain and operations management expertise to address alarm about how Apple products are made. According to Sunday’s New York Times, Cook toured Foxconn, a Chinese manufacturer of Apple products, and a day later, the Fair Labor Association (FLA) condemned long work hours and low wages at Foxconn factories.

This year, Apple was the first technology manufacturer to join the FLA, an organization that brings together universities, civil society organizations, and companies to find sustainable solutions to systemic labor issues. Apple invited the association’s inspectors into its suppliers’ facilities.   

FLA reports that it has secured commitment from Foxconn that it will reduce working hours to legal limits while protecting pay, improving health and safety conditions, and more. 

Many experts believe that Cook’s attention to the supply chain could make Apple a leader in sustainable production. According to the New York Times, “When he became chief, many people wondered whether Mr. Cook, a skilled manager of Apple’s operations, could ever rival the visionary influence of Mr. Jobs on Apple products. Instead, it appears Mr. Cook could make his earliest and most significant mark by changing how Apple’s products are made.”

According to FLA, its rules require its assessors to have unfettered access to conduct thorough investigations of Apple’s suppliers. Its report is the result of assessments at three Foxconn factories in China. This is “the beginning of FLA’s in-depth, thorough examination of the entire operation to assess whether workers’ rights and labor standards are being respected throughout Apple’s supply chain.”

China’s successes and challenges

It’s fascinating to see how Cook, a supply chain and operations management professional, is looking critically at Apple’s supply chain and taking notable steps to improve it. This week, I’m in Shanghai, China, for APICS Asia Supply Chain & Operations 2012. We created the two-day program to help supply chain and operations management professionals in China increase performance, identify and address potential challenges before they become problems, and build their knowledge and ability to apply it strategically. 

At the conference, participants had the opportunity to participate in an APICS World Café on sustainability with a decidedly Chinese spin. As the Apple story illustrates, sustainable operations mean more than protecting the environment. It includes support and respect for human rights and labor. Supply chain and operations management professionals across the globe are realizing that creating resilient supply chains means concern for the triple bottom line of people, planet, and profit. 

The attendees and I all were enlightened by involvement in the World Café and the conference as a whole. Through its products and services, APICS strives to consistently inform supply chain and operations management professionals. Using the example of sustainability, APICS has greatly expanded content in the APICS Certified Supply Chain Professional program. APICS members also can access sustainability-focused content, including magazine articles and APICS Folios, by visiting apics.org. If you haven’t lately, take a look and see what APICS has to offer. I send you my best regards from Shanghai.

Idea exchange

Now, you can take the APICS Operations Management Now discussion to your social networks on LinkedIn, Facebook, Twitter, and the APICS Supply Chain Channel. Be sure to use the hashtag #OMNow and include @Tweet_APICS in any tweets to have your words featured on the APICS homepage.

  • Do your company leaders consider sustainability up and down your supply chain?
  • What responsibility do supply chain and operations management professionals have when it comes to the triple bottom line of people, planet, and profit?
  • How can you further the sustainability conversation, APICS World Café style, in your own organization?
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