Overview
This lecture analyzes the complex global supply chain of mobile phones, focusing on key stages, ethical issues, and the benefits of ethical supply chain management.
Mobile Phone Supply Chain Stages
- The supply chain includes raw material extraction, component manufacturing, and assembly.
- Raw materials include silicon, plastic, iron, aluminium, copper, lead, zinc, tin, nickel, and barium.
- Mining often leads to environmental harm and violations of workers' rights, especially in China and the Democratic Republic of Congo (DRC).
- "Conflict minerals" (tantalum, tin, tungsten, gold) are regulated to prevent funding armed groups in the DRC.
- Component manufacturing involves many specialized suppliers, making oversight difficult.
- Assembly is typically done in large factories (e.g., Foxconn), where labor abuses have been reported.
Ethical Issues in the Supply Chain
- Labor violations are common at all stages: unsafe conditions, long hours, low wages, and lack of effective unions.
- Audit fraud and audit fatigue make monitoring suppliers difficult.
- Companies' definitions of workers' rights and living wage levels vary widely.
- National laws may not guarantee or enforce international labor standards; some countries restrict unionization.
Supply Chain Management
- Supply chain management ensures workers' rights and standards are upheld by suppliers.
- Companies use codes of conduct, contracts, and audits with their first-tier suppliers.
- Best practices include extending monitoring deeper into the supply chain and collaborating with stakeholders.
- Evaluation criteria: supply chain policy, stakeholder engagement, auditing and reporting, handling difficult issues.
Examples and Ratings
- Fairphone is the only company noted to receive the highest ethical rating from Ethical Consumer.
- Apple and Motorola score in the middle; most others rated poorly for ethics.
Benefits of an Ethical Supply Chain
- Ethical supply chains can protect human rights, improve working conditions, and safeguard the environment.
- Companies can incentivize good practices or force reform by refusing to work with unethical suppliers.
- Companies also benefit by reducing reputational and financial risks.
Key Terms & Definitions
- Supply Chain — The sequence of processes involved in the production and distribution of a product.
- Conflict Minerals — Minerals sourced from regions with armed conflict, funding violence (e.g., tantalum, tin, tungsten, gold from the DRC).
- First-tier Supplier — A company providing materials or parts directly to a manufacturer.
- Audit Fatigue — When suppliers are overloaded by multiple, repeated audits from different customers.
Action Items / Next Steps
- Review guides on conflict minerals, ethical mobile phones, and mobile phone networks.
- Explore second-hand tech buying options for lower environmental impact.