First Dispatch from Synergy 2006

I really enjoyed the breakout sessions that I attended this morning at Corporate United's Synergy conference. I estimate that there were somewhere between 80-90 attendees at the conference, making for a very intimate event. One of the break-outs that I really appreciated this morning was on the topic of supply chain ethics. Gary Drayer of Anixter International led the presentation. He started the discussion by asking his audience the question: would you make a different procurement decision if a manufacturing operation is located up the street from you or in Asia (based on environmental and other concerns)? In other words, would you apply the same standards to a different geography as your own back yard?

As we operate with increasingly complex global supply chains, ethical questions like this are bound to come up more and more. For instance, should a US automotive company selling into the lower cost Chinese market be held to the same safety standards as in the West? What should the threshold for product recalls be? Later in this presentation, Gary suggested that there are 3 separate categories of supply chain ethics to consider: choices about the law (i.e., is their anything legally stopping me from a certain decision or action); choices about economic and social issues (e.g., labor and environmental hazards); and choices about one's own self-interest. One of his next thoughts I also found insightful was the importance of rehearsing decisions and perspectives regarding supply chain ethics before an event comes up where a grey area comes into play. In a fluid global environment, you really need to know how your team will respond before an issue actually arises.

One of these areas involves bribes (which are quite common in Latin America and parts of Asia), especially in the logistics and transportation arena. Under US law for domestic companies operating overseas, it is legal to offer a "bribe" for a service that would otherwise need to be performed in an offshore situation. For example, it is OK to offer a cash payment to an individual to get your goods removed or loaded onto a local trucking provider in a more rapid manner. Some might argue this is merely an expediting fee, rather than a traditional bribe (but we all know it is really a bribe). But by the same token, paying a bribe to a shipping company to alter or delay the shipments of a competitive competitor sourcing abroad would not be legal behavior for US companies to engage in.

Stay tuned for further dispatches from Synergy 2006 later today and tomorrow! And thanks, Gary, for an insightful first discussion this morning.

Jason Busch

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