Assessments of flexible, global, rapid supply chains tend to focus on their benefits: They lower prices for consumers. They help multinational retailers get the merchandise that customers want on the shelves when they want it, at lower production costs. And they encourage the sort of innovation that induces the fast fashion revolution or makes the average lifecycle of consumer electronics products run less than eight months, which can be good for economies overall, as people buy more stuff more frequently.
But flexible, global, rapid supply chains also require suppliers to find ways to work faster and more efficiently, even if that means putting workers’ health, safety, and even lives at risk. In April 2013, the Rana Plaza in Bangladesh collapsed, killing more than 1,100 garment workers—the deadliest disaster in the history of an industry that has never been known for great working conditions.
It might be easy to assume that the terrible events are evidence simply of poor oversight in Bangladesh, where a fire in November 2012 also killed more than 100 factory workers. But some of the companies that had outsourced their manufacturing to Rana Plaza had corporate codes in place, mandating safe working conditions. They also checked some of the factories for their compliance with the codes. The remarkable news is that at least two of the factories that were located in Rana Plaza passed recent safety audits—when they clearly were unsafe.
For international firms, this situation is unsettling. If they implement corporate codes of conduct for their suppliers, then monitor those suppliers with audits, and yet still face controversy, what further steps can they take to protect the people who make the products they sell? One option is to work more closely with suppliers, rather than just auditing them. Big multinationals also could simply pay for safety improvements in their factories all over the world.
Another argument suggests that changing safety standards ultimately will require government intervention, because an efficient supply chain will never prioritize costly preventative moves to increase worker safety. In Bangladesh, the central government announced a cooperative effort with the International Labour Organization to enforce labor standards, though in general, Bangladeshi society tends to reject labor unions.
Ultimately, the responsibility may be consumers’ though. As long a buyers demand low priced products, rather than responsible supply chains, that’s what will get produced.
Source: James Surowiecki, “After Rana Plaza,” The New Yorker, May 20, 2013