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Jan 18, 2012 Bahar Gidwani

One More Step And We Get Supply Chain Cake

By Bahar Gidwani

2411563228_ab83a1f05fApple released details of its supply chain performance, via an extensive “Progress Report.”  Our friends at Supply Chain Matters provided a link to the report, and to a list of all of Apple’s suppliers.

Bob Ferrari of Supply Chain Matters has written a great analysis of the Apple report and I’m sure you’ll read a lot about it over the next few weeks.  Apple has been famously difficult on CSR matters, a topic that my partner, Cynthia Figge, recently wrote about.  Apple’s decision to (finally) be forthright about its supply chain issues may be the turning point we’ve hoped for, in the battle to make supply chains transparent.

There are standard reasons for keeping supply chain data secret.  Companies don’t want their competitors to steal their suppliers.  They have problems in their supply chain, but hope they can fix them before activists make the issues public.  They don’t have direct control over their suppliers or the buyers have a different culture and legal structure.  Buyers are at a distance and can’t tell for sure if they have problems with environmental pollution, employee abuse, use of child labor, etc.  As a result, suppliers don’t share their sustainability tracking data with groups such as CSRHub.

Apple probably will get a lot of praise for talking about its problems and for revealing a list of its suppliers.  I assume they will also receive appropriate criticism for using suppliers who fail to meet Apple’s own standards for social performance.  What we now need is for Apple and other major manufacturers to take a third step and reveal the details of their internal review on a supplier-by-supplier basis.

We already have some data on suppliers from their own public reports (many are in Carbon Disclosure Project, have decided to support the UN Global Compact, or have issued a CSR report).  We are also getting more data all the time from government agencies and crowd sources such as Glassdoor.  If we could add supply chain surveys and on-site audits from customers such as Apple, we would start to get a 360 degree view of a supplying company’s social performance.

A bad report from one customer would encourage other customers to do extra review and audits.  Before a customer changed to a new supplier, it could inspect the supplier’s reputation.  Suppliers could compete by matching the policies of their competitors, instead of trying to hide performance issues as long as possible.

Do I sound like someone who starts asking for seconds, before they’ve eaten their first piece of cake?  I must be excited because we are finally close to having the data we need to provide full supply chain transparency.  The Apple announcement is great cake…"please sir, may I have another piece?"

Photo courtesy of blakespot on Flickr (CC).

Bahar Gidwani is a Cofounder and CEO of CSRHub. Formerly, he was the CEO of New York-based Index Stock Imagery, Inc, from 1991 through its sale in 2006. He has built and run large technology-based businesses and has experience building a multi-million visitor Web site. Bahar holds a CFA, was a partner at Kidder, Peabody & Co., and worked at McKinsey & Co. Bahar has consulted to both large companies such as Citibank, GE, and Acxiom and a number of smaller software and Web-based companies. He has an MBA (Baker Scholar) from Harvard Business School and a BS in Astronomy and Physics (magna cum laude) from Amherst College. Bahar races sailboats, plays competitive bridge, and is based in New York City.

Published by Bahar Gidwani January 18, 2012