Foxconn Technology Group or its parent Hon Hai Precision are very familiar names to any supply chain professional who has any knowledge of contract manufacturing, especially within high tech and consumer electronics.  This global leader of contract manufacturing, and a major supplier to likes of Apple, Dell, Hewlett Packard, Sony and others has been in crisis mode as continuing reports of worker suicides permeate media and blog outlets.  Major media such as The Financial Times, The New York Times, The Wall Street Journal and others have been featuring continuous stories. Nine workers have died after falling off buildings, the latest being this week.  Foxconn chairmen Terry Gou has rushed to Shenzhen, the site of its largest manufacturing complex to take personal charge of the crisis that is reverberating across the globe. 

In an unprecedented move, Gou has allowed certain media access to the Shenzhen complex, and you are welcomed to view this Financial Times video link to note more to this story.

Our last Supply Chain Matters commentary concerning contract manufacturing labor practices and social responsibility took a bit of a counter view. At the time, certain bloggers and media were taking Foxconn to task for allegedly roughing up a reporter who stood on a public road taking pictures of the Longhua manufacturing facility. Much was written on the highly secretive practices of Apple, which carried over to its prime contract manufacturer. There were accusations in the use of underage labor, excessive work hours and other intolerable conditions, mostly attributable to Apple.  Many took Apple to task when it released its Supplier Responsibility 2010 Report but seemed to miss the point that audits were on the increase and that Apple was publically willing to share that it had found core violations.

My counter-argument at that time was twofold.  I denounced underage labor and excessive work hour policies, and continue to do so.  These latest incidents of suicides are further evidence that more remedial actions need to take place, and at a far speedier pace.

We also need to acknowledge supply chain and business realities. Foxconn offers its OEM customers low-cost labor and high volume efficiencies, witness the fact that it has enough business to employ over 800,00 people. The Shenzhen plant complex itself has in excess of 300,000 people, and as you can view in the video, takes on its own municipal presence in housing, recreation, and other services.  There are military installations that do not take on such a scope of people that are all housed in the same area.  That alone is cause for concern.  Workers, whether young or old, need to have tolerable working conditions, reasonable working hours and recreational outlets.  They must also be paid a fair wage for the work they accomplish, which should not include the need to work 12 hours daily, six days per week. They must also have some path to personal and career success

I applauded Apple and other high tech manufacturers for taking a more open and visible effort in auditing labor and other social responsibility practices within their supply chain.  Today’s Financial Times notes that Apple, Dell and HP have all stated that they will further investigate conditions at Foxconn.  The fact that Mr. Gou has now opened his facilities to visible scrutiny, and has established new counseling and early warning processes is a positive step in the right direction.

In my view, the ultimate barometer of progress will come from the influence of Foxconn’s major customers in their social responsibility practices, and the management teams of  Foxconn itself, proving to the world that efficient contract manufacturing can be accomplished in a responsible and responsive work environment.

Bob Ferrari

Supply chain professionals who are working with SAP as their ERP backbone, or any collection of SAP Supply Chain Management (SCM) or Supplier Relationship Management (SRM) applications more than likely are aware of the SAP Insider publications.  This organization not only produces publications and articles specifically directed at the SAP installed base community, but also sponsors a series of quality conferences and training events on key supply chain management process and information management needs. I have in the past had the opportunity to speak at some of their conferences and the Insider teams go to extraordinary lengths to insure that presentations deliver a learning experience.

At the recent SAP ASUG and Sapphire Conference held in Orlando, Bob Croce, Product Director of Wellesley Information Systems, the parent group, invited me to view the new Insider Learning Network and I was very impressed with the content and options available for community members. This community was established to help SAP users network and exchange related learning and information with other individuals, or to find expert advice or educational opportunities.  You can also perform your own blogging with other members of the Insider Community. The community can be a further social media option for your needs in SAP applications knowledge. 

You can view an introduction and sign-up for this new network at the following Insider Learning Network link. 

If you do decide to join, look for my name as a connection.

Bob Ferrari

We want to alert our Supply Chain Matters readers to the fact that The Supply Chain Council (SCC) will be hosting an Executive Summit in Houston on October 13-15.  The event offers senior supply chain executives a forum for discussing key emerging challenges in business and supply chain strategy.  It also offers an opportunity for executives to network with other industry peers through panel discussions, roundtables and other networking events. The theme of this upcoming summit is “Boom & Bust: The New Realities for Supply Chain Excellence”.

Readers may recall that SCC had sponsored these executive summit meetings on an annual basis, but the effects of the recent depressed economy had forced a postponement in past summits.  The location and venue of this upcoming October event was specifically chosen by SCC to provide a more justified educational and learning venue, as opposed to previous venues held in resort locations.  Summit attendance will be limited to 100 executives.

You can view further information and registration details at the SCC Executive Summit web site.

 Bob Ferrari

Disclosure: Bob Ferrari is an elected member of the North America Leadership Team (NALT) of the Supply Chain Council, but has no monetary interests in regards to promoting this upcoming conference.