From SCDigest's On-Target E-Magazine
Feb. 15 , 2012
Supply Chain News: The Price of Success, as Apple Announces it has Rolled Out First Supplier Inspections with the Fair Labor Association
Apple Pays the Price of Success; Are you Ready for the Media Knocking on Your Door?
SCDigest Editorial Staff
When you are king of the hill, all eyes of the kingdom are upon you.
That seems to be the case with Apple, whose ubiquitous consumer devices (iPhones, iPads, etc.) have not only propelled it to household name status and perhaps the globe's most iconic brand, it has made it the most valuable company in the world by stock market valuation, as well as holding some $100 billion in cash.
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In other words, do audits that no one else is doing, make them public, and then take a beating from the results.
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Combine that position with an image that has always been on the more progressive side, and what you get rightly or wrongly is more intense focus on its supply chain conditions that any other company. Do you know much about working conditions in Samsung's supply chain, just as an example? Neither do we. The only company that seems to receive anywhere near this level of examination is sports apparel maker Nike.
The scrutiny of working conditions at Apple's outsourced supply chain (both final assemblers and component suppliers) started in earnest in 2010, when a number of worker suicides - as many as 18 - at an Apple assembly plant in China run by contract manufacturing giant Foxconn led to questions about how employees were being treated there.
Those suicides gave Apple a public relations black eye, and the company responded vigorously, a short time later saying that it had received commitments from Foxconn to improve conditions at the employee housing complex set up next to the sprawling factory, among other changes.
Those incidents and a few additional ones caused others to look more deeply into the issue, and reportedly within Apple itself, which had to communicate to employees that it was not exploiting workers.
All that in turn led Apple to really up the ante in its audits of both first and second tier suppliers against its detailed Supply Code of Conduct. The 2012 edition released in January was based on audits of 229 facilities, an increase of 80% year over year, and detailed a number of problem areas (keeping in mind almost no one else is doingthese audits let alone publishing this type of self-assessment). (See Apple's Groundbreaking Moves to Audit its Extended Supply Chain for Compliance to its Supplier Code of Conduct.)
As part of that report, Apple also said it was going to begin to allow the Fair Labor Association (FLA), a workers' rights group, to do a number of independent audits of certain suppliers.
Just days after Apple's report was released, the New York Times published a series of articles that identified a number of real or potential worker abuse scenarios both in the past few years as well as more recently, generating mostly negative commentary from a variety of media outlets and bloggers, even as the Times noted that in many cases the first identification of the issues came from Apple itself.
In other words, do audits that no one else is doing, make them public, and then take a beating from the results.
In the next stage of this drama, Apple announced this week that the audits with the FLA have begun, starting with the giant assembly operation in Shenzhen known as Foxconn City, the site of the frequent worker suicides (where one solution to the problem had been to install nets beneath frequent suicide jump areas of the complex).
The FLA team on the audit is led by FLA president Auret van Heerden himself.
“We believe that workers everywhere have the right to a safe and fair work environment, which is why we’ve asked the FLA to independently assess the performance of our largest suppliers,” said Tim Cook, Apple’s CEO. “The inspections now underway are unprecedented in the electronics industry, both in scale and scope, and we appreciate the FLA agreeing to take the unusual step of identifying the factories in their reports.”
Cook also sent an email to all Apple employees this week saying, “We care about every worker in our worldwide supply chain."
(Manufacturing article continued below)
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