Suppliers Disregard for Workers Health at iPad in China
On Jan 25, 2012, the New York Time published articles to illustrate the reasons behind Apple`s high profit margin. On Friday evening in last May, an eruption of fire caused a terrible explosion which ripped the building where a lot of employees worked. The casualty caused 2 people died and dozens of people got hurt.
In the last decade, Apply has become one of the most successful and richest companies in the world. However, behind its success, there are a lot of problems in its labour resources, much worse is that some suppliers disregarded for workers health, such as onerous working environments and serious safety conditions. Employees often work excessive overtime, sometime without any holiday for a break. They lived in crowded dorms with harsh conditions. At the same time, some supply company recruited under-age workers and disposed the hazardous waste and chemical exposure improperly.
In 2010, 137 workers at an Apple supply company in China were injured after they were forced to use a poisonous chemical to clean iPhone screens. After that, two explosions at iPad manufactures, including the biggest one in Chengdu, killed four people and injured 77. What`s making people upset is that Apple had been alerted to have potential danger inside the Chengdu plant before those accidents happening.
Although Apple had made significant stride in improving factories and conducted a series of supplier code to improve labour environment and safety issues in recent years, the significant problems remained. More than half of the suppliers audited by Apple have violated at least one aspect of the code of conduct every year since 2007, according to Apple’s reports, and in some instances have violated the law.
Risk Management Strategy
• Apple could push its suppliers properly just like what HP, Intel and Nike did before. One thing that Apple should concern about is to control the degree of pressure on suppliers. If Apply pushes overly, it will have a negative impact on building a good relationship with suppliers.
• Make clear punishment for the suppliers who had breached the code of conduct. Apply should get boots on the ground and change old suppliers who doesn`t obey the code. The disadvantage of that is consuming lots of time to find a new proper supplier as well as plenty of money and low down the production process.
• Get help from third parties. Apple could obtain some help from third parties like Business of Social Responsibility. They will bring significant experience and strategies to supervise the performance of those suppliers. But in this method, be careful not to remove stone on own feet. As the auditing process is reported by press media or other parties sometimes, it will hurt Apple`s reputation publicly in customers` mind.
• The opinions of suppliers should be considered. The suppliers should let Apple know they are hard to reach expectation so that Apple can modulate the volume of production. Thus suppliers don`t need to squeeze their employees to work overtime. However, it must influence Ipad speed and volume of production process negatively.
• Take reward for improvement. Apple wanted suppliers only to keep slimmest of profit. But for the pursuit of profit margin, suppliers would cut corners, replace less costly alternatives chemicals and push employees to work faster and longer spontaneously. If Apple allows slightly more profit while suppliers are improving worker conditions, some problems could be forbidden. As a result, Apply would decrease its overall profit margin.
• Open up for the public http://www.51lunwen.org/dxassignment/2012/0313/lw201203130929265581.html properly. The confidentiality agreement give Apple an edge of keeping business secret, but also hold a barrier to improving working conditions. This method will put both good and bad sides of impact on Apply reputation in public
