News & Events

Bridging the gap between profitability and social responsibility

Rich Becks, General Manager, Industry Value Chains, E2open - Friday 20 January 2012
Bridging the gap between profitability and social responsibility

Apple controls one of the world’s top supply chains, which has been shrouded in secrecy for years—until now. The beloved consumer electronics company recently revealed the name of 156 companies that represent 97 percent of its supply chain. You can view a full listing here.

This is an unusual move for an industry that relies heavily on foreign component suppliers to drive margins, especially for Apple, a notoriously secretive company. According to Reuters, this move validates speculation that new Chief Executive Officer Tim Cook is driving for greater transparency.

On January 13, The Wall Street Journal disclosed rare information regarding Apple’s suppliers and its current efforts in the area of supplier responsibility and working environments. In the article, Cook stated Apple has long aimed to be more transparent and believes the steps it is taking, including nearly doubling the number of supplier audits it does, are raising the bar for the industry.

Bob Ferrari of Supply Chain Matters recently reviewed Apple’s latest “2012 Progress Report on Supplier Responsibility,” stating he was “positively impressed” by Apple’s new strategic approach. In the report, the company stated it became the first technology provider accepted by the Fair Labor Association (FLA). Apple is now opening its supply chain to the FLA’s independent auditing team who will measure performance against the FLA’s Workplace Code of Conduct, with results appearing for public view.

According to the Supply Chain Matters blog post, “Apple Provides Transparency to Supplier Social Responsibility Standards,” during 2011 alone, Apple’s Supplier Responsibility teams conducted 229 audits, 80 percent more than 2010. The audits are targeted at suppliers with the highest risk factors where findings and corrective actions can make the biggest difference.

At E2open, we are advocates for socially responsible supply chains, but also understand how difficult it can be for businesses to effectively manage multiple tiers of global suppliers to ensure they are in compliance, while still hitting their quotas.

An article in Harvard Business Review argues that it is critical to have visibility across the lower tiers of the supply chain, which often provide valuable information about the latest manufacturing advances and technological innovations. Such visibility has enabled companies to influence the development of emerging technologies, incorporate them into products before their rivals do, and secure supplies at advantageous prices.

E2open customers leverage our cloud-based solutions to gain real-time visibility across all tiers of the supply chain and the ability to quickly and effectively share information between manufacturers and suppliers to ensure targets and compliance are achieved. We are firm believers that visibility and collaborative execution are the lynchpins to a developing world-class supply chain organizations—and also bridge the gap between profitability and social responsibility.