Glo bal co mpetitio n amo ng co ntract f irms has led

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Unformatted text preview: ufacturing: Lower Costs at What Cost? Co nventio nal wisdo m suggests that leveraging cheap cont ract manuf act uring in develo ping co untries can keep the co st o f go o ds lo w. Firms can lo wer prices and sell mo re pro duct o r maintain higher pro f it margins—all go o d f o r the bo tto m line. But many f irms have also experienced the ugly do wnside to this practice. Glo bal co mpetitio n amo ng co ntract f irms has led to race-to -the-bo tto m co st-cutting measures. To o o f ten, this means that in o rder to have the lo w-co st bid, co ntract f irms skimp o n saf ety, igno re enviro nmental co ncerns, emplo y child labo r, and engage in o ther ghastly practices. The apparel industry in particular has been plagued by accusatio ns o f emplo ying sweatsho p labo r to keep co sts do wn. Despite the f act that Gap audits co ntract manuf acturers and has a high standard f o r partner co nduct, the f irm has repeatedly been taken to task by watchdo g gro ups, the media, and its co nsumers, who have expo sed unacceptable co ntract manuf acturing co nditio ns that Gap f ailed to catch. This negative expo sure includes the Octo ber 2007 video sho wing Gap clo thes made by New Delhi children as yo ung as ten years o ld in what were described as “slave labo r” co nditio ns.E. Cho , “Gap: Repo rt o f Kids’ Sweatsho p ‘Deeply Disturbing,’” CNN.co m, Octo ber 29, 2007, http:/ / www.cnn.co m/ 2007/ WORLD/ asiapcf / 10/ 29/ gap.labo r/ index.html#cnnSTCVideo . Gap is no t alo ne; Nike, Wal-Mart, and many o ther apparel f irms have been tarnished in similar incidents. Big f irms are big targets and tho se that f ail to adequately ensure their pro ducts are made under acceptable labo r co nditio ns risk a brand-damaging backlash that may turn o f f custo mers, repel new hires, and leave current staf f f eeling betrayed. To day’s manager needs to think deeply no t o nly abo ut their o wn f irm’s ethical practices, but also tho se o f all o f their suppliers and partners. Tech for Good: The Fair Factories Clearinghouse The pro...
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This document was uploaded on 01/31/2014.

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