It seems every quarter there’s a new supply chain crisis involving supplier practices and labor management capturing the attention of consumers. The latest is a rather sad story coming out of the UK papers that points to slave labor behind the production of food in supermarket aisles.
A Guardian reporter wrote that “the continued enslavement of migrants working in the Thai fishing industry highlights flaws in the monitoring of suppliers … The Thai seafood sector employs about 650,000 people, the vast majority of whom are migrant workers from poorer neighbouring countries including Burma, Cambodia and Laos. Many of these workers are trafficked into Thailand and exploited by companies using undocumented, cheap, underpaid workers."
The author goes on to note, in a highly detailed set of observations, many of the higher-level issues surrounding supplier management, supply chain risk and traceability that we explore regularly on Spend Matters in our research (see links at the end of this post for recommended reading). For example, the paper observes that “modern supply chains, particularly when sourcing from overseas, can be highly complex. Certainly, there are logistical challenges to address and there will be costs involved. But supply chain complexity and modest financial investment should not excuse companies from failing in their responsibility to ensure their supply chains are free from slavery and environmentally damaging practices.”
Overall, this is precisely the type of essay on procurement and supplier management practices that retailers don’t want to get into the hands of consumers (contrast this with Spend Matters’ recent suggestions of using procurement activities as a tool to drive marketing themes and campaigns). But in my view the essay falls short on some levels, specifically in its noting that “monitoring and oversight of supply chains can be implemented without imposing significantly higher costs on customers or creating unnecessary logistical burdens.”
This point is not necessarily true. While supplier management activities such as audits and supplier development do not need to create undue cost burdens – and many companies are making suppliers pay for such activities and annual reviews themselves through such services as Achilles and Global Risk Management Solutions – retailer and consumer demands to drive down the cost of seafood actually increases the chance of supplier infractions and corner cutting.