Dear Readers❤, This is Saradha Preethi and I'm back with another Interesting blog on "Global Supply Chain of a Mobile Phone"! If you haven't checked my previous Blogs, Do check it!😊 https://on-time-in-full-consumer-goods
In this article, we will look at some of the issues identified in the supply chain of technology companies and use the example of the mobile phone supply chain.
This article includes,
- What is included in the Supply Chain of a Mobile Phone?
- What is supply chain management
- Ethical issues in supply chain management
- Electronic companies with ethical supply chains
- The benefits of an ethical supply chain
What is included in the mobile phone supply chain?
The mobile phone has an extremely complex supply chain, which basically consists of three areas:
- Extraction of raw material,
- Manufacture of components,
- Assembly.
✔ Extraction of Raw materials:
The bottom of the supply chain is the extraction of raw materials, such as metals and metal ores. The raw materials are used to make basic phone components. Often raw materials come from mines with poor environmental records, the profits of which are sometimes linked to armed conflicts, and have little or no protection for workers ' rights.
China is one of the largest suppliers of raw materials for electronic products in the world. However, lax environmental and social regulations have meant that its mining industry is heavily associated with environmental degradation and poor working conditions.
✔ Manufacturing of Components:
The next few steps in the supply chain require manufacturers to convert the raw material into a usable material or component. The end product consists of many different components, each with its own supply chain.
The basic smartphone consists of the following components:
- A circuit board containing the brain of the phone;
- An antenna,
- A Liquid crystal (LCD) display;
- A microphone;
- A speaker;
- A battery and
- A camera.
Component suppliers are numerous and will often specialize in particular parts which may be used by many different brands. For example, the iPhone contains components from more than 200 suppliers. This is usually part of the supply chain of companies with the least control or knowledge due to the number of manufacturers involved.
✔ Assembly:
Once the components have been supplied from the manufacturers, they are taken to the assembly plant. In China, Foxconn is the largest company to assemble components for electronic companies. The iPhone is famous for its Zhengzhou facilities in China. According to the New York Times, 94 production lines and about 400 steps are needed to assemble the iPhone.
Supply Chain Management:
Over the last ten years, companies have recognized that many infringements of workers ' rights have taken place further down their supply chains and have therefore extended monitoring and auditing processes to include some of these suppliers. It should be noted that not all companies do this.
Ethical Consumer expects all companies producing a physical good to have a policy of managing the supply chain. We then rate each company on the basis of a set of criteria. These criteria assess its policies as well as how it implements its audit strategy, what stakeholders it works with to verify labor standards, and how it addresses difficult issues such as illegal freedom of association.
The Ethical Consumer Supply Chain Management Policy Rating is broken down into four parts:
- Supply chain policy
- Stakeholder engagement
- Auditing & Reporting
- Different issues
Ethical Issues in Supply chain management:
- Many companies have different definitions of the rights of workers.
- Audit fraud & fatigue
- Failure to meet the standards set out in the code of conduct of a company.
- Country law & regulations
Electronic companies with Ethical supply chain:
Currently, only Fairphone receives Ethical Consumer's best rating for its supply chain management in our mobile phone guide. All other electronic brands in our guides receive the middle or worst rating of their supply chain management.
The Benefits of an Ethical supply chain:
- A company with an ethical supply chain will choose suppliers who respect the environment and their employees and reward suppliers who pursue good practice and encourage others to do so.
- On the other hand, if a breach is found in a supplier company, it often wields a huge amount of economic power. By making it clear that they will not buy from those who abuse workers' or environmental rights, they can force reform within the sector and prevent the violation from happening again. Suppliers can no longer afford to allow disasters such as serious pollution, deforestation, or factory fire if they risk losing customers. They will, therefore, ensure greater due diligence and care.
Happy Learning with Sara!!😎
