RESEARCH ESSAY: Commodity chains –
What are the costs and benefits—to, for example, workers, the environment, the host nation-states—of the production of the goods widely consumed in the developed world?
No matter the company, the production of goods in any shape or form is bound to have both costs and benefits to its consumers, its workers and the environment. The widely used phrase ‘commodity chain’ describes process by which firms gathers resources, transforms them into goods (commodities) and, in the final step of the process, and distributes them to consumers (Sparke, 2013). In our age of technology and the ever reigning presence of the internet, commodity chains are becoming increasingly more transparent, just as transgressions of large multinational corporations are brought to the public’s attention much more frequently (Sinclair, 2012). To thoroughly explore the logistical side of commodity chains, this paper will be examining the example of Apple, the American multinational corporation headquartered in California, which designs, develops and distributes our Apple electronics - our iPhones, iPads, iPods, MacBooks, iMacs – as well as various online services and computer software (Apple Inc., 2014). When it comes to customer service, Apple is a bold innovator – very much leading the industry and forces others to catch up. To Apple’s credit, they have also set an incredibly high standard in their innovative energy-efficient electronic products (in fact, the most
Personally I worked for a video game company called FuncoLand which was purchased by a company called Babbages, which merged with Electronics Boutique. After the merger the name of the company was changed to GameStop which is now the largest video game retailer in the United States. The thing that makes this important to this paper is that when FuncoLand was purchased by Babbages the supply chain changed. The change in the supply chain meant that all orders must be relooked at to insure the same profit levels for products that GameStop enjoyed.
Consumers increasingly consider the social impact of the money they spend. Some will pay more to support retailers who assert sustainable practices, for instance, by buying products made with recycled material. Others avoid companies notorious for irresponsible or unethical practices, such as outsourcing manufacturing to exploitative sweatshops in under-developed countries. More than ever, retail store owners must consider the ethical and social ramifications of their actions, as well as the actions of their suppliers (Mack, n.d.).
into account the main source of emission make a negligible impact. Even if a community
Going back to CSR, Vans had faced dilemmas of unethical treatment of its labor force hence in the manufacturing aspect whereby sweatshops make most of the production units. Virtual organizations adhere into environment uncertainties that require buffering, boundary spanning, strategic alliances and co-opting, and Vans understands this very well. However, various unethical criticisms necessitated Knight to rethink its organization. Heal (2008, p. 168) points out the responsibilities of a Western company outsourcing to a poor country. Frenkel (2001) termed the process as the international contracting wherein a buyer-driven commodity chain is apparent. In such an arrangement, the lead firm, in our case Vans, is a brand name merchandiser in a developed country. Vans orchestrates the
If there was a choice for you as an American consumer between a Wal-Mart store that uses foreign goods and services over a local business that purchases local goods and local services, which one would you choose? Thousands of people choose to shop at Wal-Mart every day, which isn’t just the world’s largest retailer; it is the largest company in the global economy that brings the lowest possible prices to its customers. It has grown very rapidly throughout the years, bringing great bargains to its customers. However, despite Wal-Mart’s lowest prices, almost no one outside the world of Wal-Mart and its suppliers knows the high cost of those good deals. To reach a nearly unapproachable goal, Wal-Mart chose to avoid the United States’ products
The fact of the matter is, “The existence of global poverty helps to ensure the wealth of affordable goods for western consumers.” (Eglitis 224) The supply of these affordable goods and products that are so readily enjoyed by western consumers is a direct result of the benefits gained from participating in a global manufacturing
Cooperated with partners and leaders in the field of supply chains and transport, the World Economic Forum’s Global Agenda Council on the Future of Logistics and Transportation started to conduct research on the supply chain. The report “Beyond Supply Chains Empowering Responsible Value Chains” analyses the impact that supply chain practices has brought to business, society and environment, and explores the issue how shared value can be made through better supply chain decisions. The report identifies “a set of 31 proven supply chain practices which provide companies with a blueprint of where they can gain both commercial and socio-environmental advantage (both environment and local economic development)—driving a triple advantage” (). In addition, the report “provides a framework for evaluating the potential value at stake behind each of these practices, and an implementation framework for
Wish to buy the best commodities from one of the most developed sources in the world?
“In today's global factory, the production of a single commodity often spans many countries, with each nation performing tasks in which it has a cost advantage.”
27 May 2010 | Richard Brass Tyrannical, secretive - and a huge success. Richard Brass investigates how Apple devised the ultimate supply chain In each of the past two years, AMR Research has named Apple’s supply chain the best in the world. Its operation, the supply chain consultancy says, marks “an epic shift away from the 20th-century production-efficiency mentality to a new era of value based on ideas, design and content.” And the financial results are remarkable. Quarterly revenues of $13.5 billion (£9.1 billion). Net quarterly profit of $3.1 billion (£2 billion), with earnings per share twice what
|More access to food, services, healthcare etc. all over the world |Heavy environmental cost |
Production is examined closely to determine how society will be able to benefit and what resources will cause it to fall. (Investopedia)
Amazon is the big online shopping conglomerate we know today, which is known for their presence in the online shopping scene. They started with Jeff Bezos’ leadership, growing to where they are today. Amazon is a powerful company, however it is not without its problems. The company’s problems regard its strategies with growth, compared to Patagonia, leading them towards unsustainable results (LMPGS). To bring forth my proposal, I will talk about the narrative of Amazon’s start. Also, the definition of sustainability and why it’s relevant to the proposal at hand. Thirdly, a counter-argument will be brought forth on a practice used by companies that counteract sustainability. The proposal to change practices, such as the waste of packages, and the communication with suppliers. Amazon could be made more sustainable by studying other, less growth-oriented companies.
Increasingly globalized distribution systems present obstacles to promoting sustainability and justice in the distribution of goods. It is harder to track the location and conditions under which products are made and harder to hold decision makers accountable along the way.