Apple CSR and Supply Management Reporting

Of all companies, Apple is the most in the spotlight for corporate social responsibility (CSR) practices and its supply chain. Supplier labor practices continue to dominate the supply management risk conversation Apple headlines relative to conflict minerals, etc. (We hope to hear more about Apple and conflict minerals in 2013, down to the stainless steel and other metals used in Apple stores let alone the tin, tungsten, gold, etc. in their products.) But for labor practices, The Next Web recently did a good job summarizing some of the findings from Apple's recent interim report on supplier practices.

Here are some of the highlights:

"Apple's December update notes that it is now tracking 1 million workers -- up from 900k in November and 500k when the program began in January. Apple requires that workers never work more than 60 hours in a week, which is in line with Chinese labor law. Unfortunately, it saw a drop in compliance from October's 90% mark, back to the 88% levels of September. This is also down from the August high of 97%."

What might Apple do to improve its labor situation in China – and beyond? For one, perhaps as Apple fleshes out its reshoring strategy, we'll see an increased focus on automation in new facilities given higher labor rates in the West compared with China. But in confronting the challenge of supplier management head-on, Apple should apply some of the same systems it has access to in the contingent workforce area to having its suppliers on-board, off-board and manage the lifecycle of workers and compliance (consider this approach a multi-tier VMS for labor and compliance). And at the same time, there's no question that a company-wide supplier information management system (Aravo, HICX, SAP, etc.) deployment that ties in auditing to other lifecycle management and risk factors would also help.

- Jason Busch

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