APICS Operations Management Now

http://www.apics.org/Resources/OmNow.htm

APICS Operations Management Now
January 13, 2012 edition


APICS CEO
Abe Eshkenazi
CSCP, CPA, CAE
Human Rights and the Law

On January 1, 2012, the California Transparency in Supply Chains Act
went into effect. Its goal is to ensure that large retailers and
manufacturers—defined as companies who do business in the state and
whose annual worldwide gross receipts exceed $100,000,000—provide
information about their efforts to eradicate slavery and human
trafficking from their supply chains.

Which means … what, exactly? As the San Francisco Chronicle reports,
even though the bill was enacted in 2010, “many California companies
either don’t know about it or are scratching their heads over how to
deal with it.” It appears that, currently, all it takes to be
compliant is to disclose a certain amount of information in a clear
manner on a corporate website. This required information includes
whether the company is looking into the existence of slavery and human
trafficking in its supply chain, whether it verifies that its
suppliers conform to the same code of conduct on labor practices,
whether it provides training for managers on this sort of risk
mitigation, and more. “In other words,” as the Chronicle’s Andrew Ross
writes, “you’re not actually obliged to do anything, but don’t promise
what you can’t deliver.”

It will be interesting to see how companies react to this piece of
legislation. Already, compliant web pages are appearing on many
corporate websites. I took special note of Hewlett-Packard’s page on
the Transparency in Supply Chains Act, which can be found here. There,
HP discusses its measures such as risk-based supplier assessments,
supplier agreements, and professional training that demonstrate its
observance of the law’s requirements.

But this page is just a fraction of HP’s section on supply chain
sustainability. HP goes in-depth, disclosing the names of its
suppliers, the results of its supplier audits, and its goals for the
future. According to HP, it has been making these efforts since 2000,
when it began its supply chain social and environment responsibility
program. The company is a member of the Electronic Industry
Citizenship Coalition, a group for responsible supply chain
corporations, and subscribes to its code of conduct. What’s striking
is that HP has undergone these measures without any legislation
demanding them.

Navigating a sea of regulations

Regulations regarding hazardous substances in a supply chain have long
been common concerns for operations and supply chain management
professionals, but only recently have laws regarding sustainability
practices become more common. Of course, the first step for anyone in
the industry is to learn all the laws and regulations for your supply
chain—which might be a daunting task in itself, considering the global
reach of today’s supply chains.

The next step is to evaluate how to make supply chain decisions while
considering those standards. Doing this, according to the APICS
Certified Supply Chain Professional (CSCP) Learning System, requires
you to “think like a supply chain manager. Think of the overall
functions that are included in the entire supply chain and look for
causes and effects.” This includes elements such as environmentally
designed facilities, the safety of employees, the use of toxic
materials, and the choice of carrier.

Supply chains, and the laws and regulations that govern them, are
becoming increasingly complex and demanding. We created the APICS Asia
Supply Chain & Operations 2012 conferences with the goal of addressing
this complexity on a global scale. The learning tracks cover subjects
such as critical sourcing decisions, infrastructure risk, and supply
chain strategy, and the speakers will represent a range of expertise
from North America and Asia. We are excited to have the opportunity to
present these conferences on April 2–3 in Seoul, South Korea, and
April 5–6 in Shanghai, China. I hope that you will join us.