Apple’s Supplier Report Only Scratches the Surface

Late last week Apple published its Supplier Responsibility 2012 Progress Report in conjunction with a list of its leading suppliers. The 2012 Progress Report provides insight into the findings from 229 audits that Apple performed within its supply chain in 2011.

The report found that almost a third of Apple’s audited suppliers do not abide by the company’s standards, with widespread labor abuses, and violations of environmental and raw-materials sourcing standards. Apple responded to each of the findings, stating it was either proactively working to improve standards or had terminated the supplier relationship.

Apple is to be applauded for its increased audit efforts, which should yield year-over-year supplier improvements. But perhaps the bigger news is the release of supplier names—a very unusual step.

This is the first time Apple has offered a look into its supply chain. One can imagine that the release of the list will expose Apple’s leading suppliers to more scrutiny from organizations like the Fair Labor Association. However, Apple, like other leading companies, has just scratched the surface when it comes to understanding the substances and materials that go into its parts and products, as well as the environmental impact and labor practices involved with manufacturing their supply-chain components.

While Apple notes that its disclosed supplier list of 156 companies “account for more than 97% of what we pay to suppliers to manufacture our products,” it does not reflect the true size and scope of the supply chain. What about their supplier’s suppliers, with whom they do not deal directly and likely do not know, but who build many of the parts that go into supplier’s components and, ultimately, Apple products? And what about the next tier of supplier?

In the world of electronics, a company can expect to have several tiers of suppliers. In order to fully assess a product’s impact, today’s companies need to facilitate even greater communication, information sharing and reporting within their entire supply chain, not only with the companies with whom they do business directly.

While Apple has made great progress with its suppliers, it’s vital that all companies make supplier and component information, such as material and substance data, certifications, and environmental impact assessments, available during the earliest stages of product development in order to ensure that next-generation products are designed to be more sustainable, responsible and profitable.

Want to learn more about best practices for collecting product material and compliance data? Download the white paper.

Photo Credit: Melissa Dickson on Flickr (CC BY 2.0)

This entry was posted in Industry News, Supply Chain & Compliance and tagged , . Bookmark the permalink.

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