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Grey area of supply chains is a kaleidoscope for learning

The World Economic Forum (WEF) – best known for its annual meetings in Davos – uses the strap line ‘Committed to Improving the State of the World’. It is under this strap line that it published a report recently, called “Building Resilience in Supply Chains“.

It’s an interesting report. It argues for the importance of taking a proactive, rather than reactive, approach to managing the risks to global supply chains. It comes from a perspective that global supply chains are an inherently good thing – “fuelling trade, consumption and economic growth”, and that the risks from major disruption are so great that new strategies for making them more resilient to shocks are needed.

This report got me thinking about the other aspects of global supply chains that are not covered in this report, but that could to be considered in the context of that WEF ‘Committed to Improving the State of the World’ strap line.

Supply chains have a major impact on the quality of workers’ lives across the world. The questions asked by companies when sourcing their materials and products (and the questions that consumers ask of the companies they in turn buy from) can impact on issues like health and safety, child labour, forced labour, and working hours. They can also have a major impact on sustainability – for example, whether or not raw materials are from sustainable sources.

One of the companies which I think seems to be taking these issues seriously is the John Lewis Partnership (and its Waitrose supermarket subsidiary). It’s fascinating to see that, in their website section on supply chains, they bring their approach back to their ‘ultimate purpose’: happiness of their partners – and say that they believe they have a role in helping their suppliers in turn to improve the lives of their workers too.

From Think Global’s perspective, looking at supply chain issues is a very rich source of global learning. Why? Because there are rarely straightforward black-and-white answers.

Take the case of child labour. Of course, a very strong case can be made for not sourcing any goods from suppliers that use any form of child labour. But it is also important to consider what child labour means to families in dire poverty – for example, a small but important source of income – and what happens if that is lost, without any compensation. On this issue, people are likely come to the same conclusion – but by understanding the complexity of issues, decisions will be more informed and thus probably better.

Take another example of the air miles that can be involved in global supply chains. Is it right that many of the vegetables on sale in British supermarkets are flown in from Kenya, for example? One point of view will highlight the huge carbon footprint involved in flying in vegetables that could be grown here; as well as the environmental concerns for the high intensity horticulture in Kenya; and the high levels of malnutrition in the country. But another point of view will highlight the ½ million Kenyans that are estimated to be supported by this industry, and its importance as a foreign exchange earner.

These are not easy or straightforward issues – as is the case with almost all global issues. They are hotly contested. But they are issues which are so fundamental to creating a ‘more just and sustainable world’ (Think Global’s strap line) or to ‘improving the state of the world’ (the WEF strapline), it is vital that we grapple with them. A blog we wrote some time ago on Food Security looked at the Foresight report, which argues for education of consumers in prosperous countries being a key to adaptation and building resilience.

And people in the UK do seem to be becoming more educated about global and local connections, and are asking more questions about these issues. And, as John Lewis Partnership seem to be doing, it is important that businesses are non-defensive, transparent and willing to continuously improve. In the long run, this approach is better for business – by taking an honest approach to these complexities, companies can avoid the charge of ‘green washing’; and it engages consumers in dialogue, reducing the risk of ill-informed knee-jerk ‘clicktivism’.

Photo of Tom Franklin

By Tom Franklin, CEO, Think Global

 

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