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Supply Chain Safety Moves to Factories around the World

APICS CEO

Friday September 22, 2017


Increasingly, company leaders are working to improve the health and safety of employees throughout their supply chains.

Last week, Financial Times highlighted the experience of British mobile technology company Vodafone, which has a logistics operation and thousands of suppliers in lndia. Five years ago, contrary to local practices, the company started requiring all staff and contractors to wear helmets when riding on two-wheelers. Matthew Rae, Vodafone’s director of health, safety and wellbeing, says that balancing those cultural differences with safety obligations requires “perseverance and consequence management.” 

These experiences are not limited to Vodafone or operations in India. “Multinational companies such as Vodafone face considerable challenges to ensure the health and well-being of their wide network of staff and suppliers,” Hannah Murphy writes. According to the Economist Intelligence Unit, supplier adverse events are happening more frequently. Supply chain risks of this nature include criminal activity and violations of human rights. These risks are especially evident in developing countries, where the Financial Times reports that only 10 percent of the working population is effectively protected by health and safety laws. 

Still, there is some evidence of progress. Consider, for example, the improvements made by the clothing industry after 2013’s Rana Plaza disaster, when a Bangladesh garment factory collapsed and killed more than 1,100 people. Clothing retailers have since stepped up to monitor how their suppliers treat workers. 

“A big driver in this area now is reputation,” says Richard Jones, head of policy and public affairs at the U.K. Institution of Occupational Safety and Health, in the article. “There’s this corporate desire for maintaining a ‘social license to operate’ that can help companies to attract and retain talent in their workforce, [and] to secure investment.” 

The best programs work to improve employee well-being and reduce accidents — and these can have financial benefits for the companies too. Tufts University research for the International Labour Organization shows that global garment factories where workers report enhanced working conditions and improved health and safety compliance are more productive and profitable. By contrast, when companies pressure suppliers for quicker turnarounds and penalize them for late deliveries, factory supervisors show greater stress and are more likely to verbally abuse workers.

“Successful organizations should have very clear values and monitor the supply chain — as opposed to over-managing them — to ensure some kind of cultural transference,” says Karen McDonnell, occupational health and safety policy adviser at the U.K. Royal Society for the Prevention of Accidents. By encouraging safety and employee well-being throughout all of the tiers of a supply chain, companies can protect workers around the world and create more socially responsible industries.

Spreading health and well-being while decreasing risk

But ensuring the health and safety of employees throughout your supply chain isn’t just about doing good; it’s also about performing well. The Financial Times article illustrates that as supply chains expand internationally, companies can face increased risk to their reputations and their bottom lines.

Consider the following definition of triple bottom line as it appears in the APICS Dictionary, “An approach that measures the economic, social, and environmental impact of an organization’s activities with the intent of creating value for both its shareholders and society.” 

Think about how mastering supply chain concepts can give you and your company the ability to reduce risk, improve your supply chain relationships and potentially improve the lives of employees all around the world. Earning your APICS Certified Supply Chain Professional (CSCP) designation provides you with knowledge and advantages to jump-start these increasingly important processes. Find out more about APICS CSCP at apics.org/cscp.
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  1. art October 15, 2017, 12:54 PM
    graet blog

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