Global sourcing exam 2 Corporate economic environmental political and social responsibilities include the ethical obligation of businesses to value and support the well being of their employees customers and suppliers and the resources environments and laws in countries in which they operate Codes of conduct are one corporate response that gives attention to these responsibilities in the supply chain and in business decision making processes Sustainability integrates economic political environmental and cultural dimensions to promote cooperation and solidarity among the people and generations in its supply chain Consumer activist organizations have been primary sources of pressure on corporations to assume more social and environmental responsibility Social and environmental corporate responsibility involves a wide range of obligations Social responsibility Reports of unjust labor practices in scenarios of labor intensive production Exploitation with regard to pay scales below a living wage sexual harassment extended work hours and child labor Environmental responsibility Issues include climate change protecting nature and biodiversity and resource and waste management Formation of joint action groups Apparel or textile firms coming together with common goals A code of conduct is a statement of principles and standards by which business Trade associations collaborating with divisions of government Parts of supply chains collaborating to improve the totality of their processes decisions are made Worldwide Responsible Accredited Production WRAP Most widely used social and environmental compliance certification program for the apparel industry 5 step process of WRAP certification Application Self Assessment Monitoring Evaluation Certification Fair Trade seeks greater equity in international trade WTO 2009 o Standards of fair trade address o Opportunities for economically disadvantaged producers o Transparency and accountability o Trading practices o Payment of fair prices o Child and forced labor o Gender equity and freedom of association o Working conditions o The environment Fair wages with gender equality Human Rights No child labor Healthy working conditions Respect cultural identity Recognize trade unions Business Relationships Democratic cooperative workplaces The Larger Environment Environmental protection Environmental sustainability Businesses have to Make profits to invest in the company s growth and reward stockholders for Fair prices that cover the cost of production Financial and technical support for growth Long term relationships Social premiums to improve conditions Consumer education their investments Maintain a payroll that compensates owners and employees for their efforts Morals are the degree of conformity with generally accepted or prescribed Ethics is a system or code of morals of a particular person group or profession standards of goodness or rightness Ethical decision makers need the following three qualities o Competence o Self confidence o Tough mindedness Sources of Moral Development Family Religion Education Electronic media Music Sources of Moral Development Family Religion Education Electronic media Music Because of the multiple political religious and cultural perspectives no single code of human rights exists and many people are deprived of life liberty and security as well as certain social and cultural rights Factors that contribute to vulnerability and labor exploitation include poverty gender age and ethnic or racial origin Human rights abuses have led to the creation of organizations that defend human rights Labor and trade unions Social and environmental activists A labor union is an association of workers with the purpose of bargaining with employers on behalf of workers about terms and conditions of employment Collectively workers can threaten to strike to get the attention of employers and force them to negotiate Three levels of organization local national or international and federation The growth phase 1920 1960 Organizational phase 1880 1920 Mergers begin 1960 1980 Ch5 Attention turned to immigrants 1980 1995 Environmental activism phase current Sourcing determining the most cost efficient vendor s of services materials production or finished goods or a combination of these at a specified quality and service level for delivery within an identified time frame One entity desires some material product or service the customer while the other provides it the vendor Informed decisions must be made regarding whether to Develop and produce materials and garments in house Purchase finished garments Contract a vendor to develop and produce the garments Two basic factory direct models used for contracting production of finished garments CMT Full package CMT sourcing Full package Original sourcing company customer bears all the costs does development sources the fabric delivers the fabric to the vendor and pays duties and transportation costs Production contractor vendor provides the expertise and equipment for the actual production of the garments In full package sourcing the vendor must contribute to and finance most of the manufacturing process including product development and sourcing Efficient full package production requires Higher levels of management expertise Latest technology Fully developed infrastructure Financial resources to assume the majority of manufacturing expenses Many retailers have expanded their merchandising activities to include development of their own products Private brand reflects the ownership of an exclusive label by a brand manager or retailer If the retailer contracts production of these products offshore it becomes a private brand importer Brand importer Today many traditional manufacturers practice the process of outsourcing much of their production to offshore facilities that they either own wholly or operate as joint ventures Other Sourcing Venues Methods of sourcing include Trade shows and trade fairs Joint ventures Licensing agreements Hiring of sourcing agents Determining which sourcing option is best for a business is influenced by numerous factors and dependent on Type and quantity of products needed Monetary costs of acquisition Time required to produce and deliver Customs requirements in different countries Manufacturing Philosophies Agile manufacturing methods as a part of quick response were at first promoted as tools contributing to flexibility and speed on the production floor Lean manufacturing