So Your Supply Chain is Banning Bangladesh….and Going to Cambodia?: “The Ugliest Race to the Bottom”

Supply Chain View from the Field

For instance, Puma’s factory in Phnom Penh, Cambodia, worked with the Fair Labor Association to discover a “strong possibility” that fainting workers in the factories was caused by chemical exposure and cited excessive overtime and insufficient drinking water as contributing factors. In our ongoing discussion of labor and human rights violations in the supply chain, we’ve discussed in prior posts the problems that occurred in Bangladesh resulting in over 700 dead.

6 Common Supply Chain Mistakes and How to Resolve Them

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The cost of recovery from a disruption in procurement management depends on factors such as supply source, volume, manufacturing location and inventory. The workers, mostly in Cambodia and Myanmar, were paid unreasonably and locked into contracts. Supply chain consulting firms find that most CEOs hold the Chief Procurement Officer responsible for disruptions to the supply chain, although the specific parties that the CPO holds responsible for this possibility is less clear.

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Global Sourcing and Human Rights Go Hand in Hand

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Low-cost country (LCC) sourcing is now a commonplace strategy for shrinking bottom line labor and material costs in most consumer products industries, including apparel, footwear, toys, and other manufactured products. Organizations continue to scour global markets for even lower labor rates, moving from Western China to the Pearl River, and now to Vietnam, Indonesia, Malaysia, Cambodia, and North Africa.

Are US-Chinese tariffs part of the new normal?

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The trade war backlash, impacting more than just soy farmers and auto manufacturers is prompting organizations to adapt in ways that will disrupt global supply chains.”. Steve Madden is currently in the process of shifting handbag production to Cambodia. Several other Apple suppliers also announced that they would either build new manufacturing factories or boost production capacity in India. Procurement executives need to begin thinking through their strategies today.

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