Supply Chain Management Issues - Essay Example

Introduction Today, more than ever, it has become increasingly important for business organizations to have an elaborate marketing system to be ableto compete favourable in this era of high competition. With the current cut throat competition in all industries, business organizations with elaborate retail outlets have high chances of reaching its customers and being able to realize its sales target. However, in their quest of outdoing each other in the business world, companies are also increasingly being faced with the ethical regulations, social responsibility and environmental concerns that they must address in their course of its operations. With the present heightened ethical and environmental concerns, companies which operate in ethical manner and care about the environment are bound to succeed in their business endeavours than those ones which are not. Retail supply chains in the fashion industry are networks distributions options which performers the roles of procurement of, conversion of the materials into intermediary and finished goods, and the distributing of these end products to customers. Supply chains exist in both service and manufacturing organizations, although the complexity of the chain may vary greatly from industry to industry and firm to firm. (Rhys, 2005) The company's code of conduct Codes of conduct of an organization or a company, define the ethical standards that are developed by the Organization or Company. Therefore, the two go together. There has to be a document that describes the responsibilities of the company towards the people that it regularly gets in contact with. For accompany to ensure that the codes of conduct are complied with its employees, it sets up programs to ensure that the employees are made aware of the existing codes of conduct put in place by the company. This is also to carry out audit compliance. It is the process of measuring, evaluating, reporting, and adapting a company's social impact and ethical behaviour in light o fits values and expectations of the people it gets in contact with. This is often difficult for most companies to undertake alone. Therefore a more practical approach is them using existing certifications like ISO 9001 and ISO 14001. The latter is concerned with safety issues while the former dictates the aspects involving the environment. The two issues are the ones that are responsible for continued innovation. There are other certifications which protect Companies from various problems in their day to day operations. Example, there is one that protects suppliers from customers' unethical behaviors. Labour conditions are also set by some of the certifications. In general, the is-certifications and codes of conduct improve on the accountability of a company to its stakeholders and employees. (Sternberg, et al.2000). This paper will try and examine the ethical social responsibility and environmental considerations of a fashion company operating in the UK. The Gap In the last ten years or so, The Gap Company has underwent a course of vibrant growth through its diverse trademarks (Gap, Gap Kids, Banana Republic, Baby Gap Store, Gap Shoe Stores,) which the company markets and have a direct control all through the world. Following this success, Gap Company since 1999, became the second largest apparel retailer stores. The company, which usually subcontracts every one of its production, has since formulated a code of conduct that creates company selection criterion and the particular ways of submission. The company in emphasizing the way it values it code of conduct has undertaken services of an external monitoring company to monitor how its ethical code of conducts is followed. (Gap, 2008) Ethics Companies view The ethical standing of products is has of late become a main concern of many consumers. Presently the fashion industry is undertaking ethical fashion as championed by fashion designer Hamnett Katherine, at the present moment GAP as a company view with a lot of seriousness and it has undertaken strategies to ensure that the company products are ethical fashioned. This is being done through ensuring that clothing which are being retailed by the company, have no any detrimental impacts on the customers or the even the environment. At what cost The company uses both human and capital resources to ensure that the ethical practice is implemented. GAP chief ethics and compliance officer is the one who ensures that the GAP office of Ethics is well managed. The code of ethics put in place by GAP, is the general ethical principles, values and standards that directs the company in its daily operations. The code of ethics applies to all the employees and any person who gets in to contact with the company on business issues. This dictates how employees are supposed to carry out their daily operations. Importance to customer To achieve customer satisfaction the GAP Company has set values, which puts customer satisfaction as it priority. The company has five core values that are crucial aspects of its company ethical practices. These values influences the way the company work daily and in all places. (Gap, 2008) Feasibility The ethical conduct undertaken by the company are feasibility has research into the aspect was undertaken before the company adopted the ethical conduct, environmental sustainability measures and also the corporate responsibilities that the company has undertaken. The outcome has been increased sales which attest to the factor that people buy more from the companies which practices ethical practises. (Gap, 2008) Could create limitations/reduce competitiveness Ethical practices and corporate social responsibility increase the image of a company in a positive manner and thus gives it an advantage. This is because the company's image is of great importance and the customer wants to be associated with companies which are conscious of the society. Key Ethical/ Environmental issues in or affected by Supply Chain activities There are several main ethical and environmental issues which are affecting the supply chain activities. Some of these issues are Discrimination and Sexual harassment or any other form of discrimination, Human Rights, forced labor or child labor, employee benefits, Workplace Health & Safety, products quality among others. As for the environmental concerns, the ethical issues affecting the sector, includes, waste management, sustainable environment practices, Pollution, energy efficiency and harmful emissions to the atmosphere. (Donaldson, 2007) Scale/ Importance Currently the importance of ethical conduct and environment management in the fashion industry has elicited significant concern in the UK. Though the industry is small compared to others, its importance is crucial to the people and that is why their concerns are much more. With ever increasing high competition being witnessed in the industry, industries are bound to be tempted to encompass some unethical practices in their business so as to increase their profits. Similarly, for environmental degradation has been going on and such the importance of environmental management is high especially on the area of waste management and harmful emissions. (Donaldson, 2007) Ability to manage/influence/ control Since the industry is small, its waste and other aspects which directly involve environment can be easily managed because of the low amounts being produced by the industry. As for GAP the company has implemented successful measures particular in outsourcing to ensure that it deals with environmental conscious companies alone. The company also have adopted high technology and other means in reducing effects of their by products on the environment. More so, the company offers training to its employees to ensure that they understand environmental management strategies. (Donaldson, 2007) Current view of the issues in retail within UK With high cost of production on many products companies strive to reduce this cost, one way of reducing the cost is through cutting distribution costs by having retail store which can take the products to the customers more effectively. This is the reason why retail chains have become increasingly more important and successful in marketing channels. As such the present view regarding retail within the UK is that retailers are vital in the marketing channel and their significance continues to increase. (Williams, 2006) The manner in which GAP is addressing this issues Methods of application Keywords Corporate Sourcing Policies Basic principles duty for the trade partners to value sourcing Guidelines for seller Selection mandatory signature of a seller-compliance accord Application Consent of the subcontracting company by representatives of Gap regular inspection the Unethical company: Primark Store Primark discount clothing retail chain loved of good deal hunters was rated as the least ethical store to purchase clothes in the UK; this is according to "Ethical Consumer" publication, in its January/February (2005). It criticised the Primark Store for lack of code of conduct, retailing leather products and "environmentally-detrimental" PVC merchandises. Primark Store More so scored poorly since its owner, Wittington Investments, did badly for environmental management. Table 2 The table below outlines the differences of GAP and Primark in relation to ethical practices. Ethical Ethical company unethical principles gap Primark employee Treats employees as equal and accords them the highest respect and values their services, through high remunerations The company values the management more than the low strata of employees and do not value their decisions Vendors Deals with vendors were are ethical and who protects the environment. Deals with any vendor regardless of if the vendor is ethical or not. Environment Applies the regulations stipulate d by the local community and international laws Apply mainly international agreements and may overlook the local community products Refuses to deal in products which whose raw materials are from animals Deals with any products even those whose raw material are from animals Customers Treats customers as the most important stakeholders of the company The company is not customer oriented Political Only operates in countries which are viewed to be democratic Deals in any country even those viewed as having repressive regimes. The Gap Company has strong code of conduct put in place. The employees are allowed to voice complaints when they feel short-changed by the company. They are given an opportunity to voice out opinions of what they expect from the company and also ask about anything when in doubt. This has enabled the company to well in its sells and be respected by its customers. While Primark Company has poor ethical practise which as reduced the esteem of its customers. Conclusion Corporate codes should not aim at establishing a fixed set of core workplace right, but rather at creating a process that makes workplaces as good as they can be, and better over time, as companies become capable and national institutional capacities more developed. (Anderson, 1993) GAP Company should aim at establishing corporate codes that aim at delivering good services to customers. The company should be able to understand the weaknesses of some of its codes so that it can be able to come up with new and better ones. The company has set codes to focus on cure rather than prevention strategies. These codes should be revised to favour patients so that it focuses more on the prevention strategies. Reference: Anderson, E. (1993): Value in Ethics and Economics. Harvard University Beyer, H., Rojas, P. &Vergara, R. (1999): Trade liberalization and wage inequality. Journal of Development Economics, Vol. 59 Donaldson, T. (2007): The ethics of international business Oxford University Press. New York Ethics and international affairs. Vol. 16 Gap (2008): Beyond the label: gap inc.'s commitment to ethical sourcing, Hickman, M (2005): Primark is named as least ethical clothes shop Consumer Affairs Correspondent, Press. London Rhys J. (2005): Corporate Codes of Conduct. Self-Regulation in a Global Economy. Oxford University Press. U.K. Singer, P. (2002): One world: The ethics of globalization. Yale University Press. New Haven, Conn. & London. Skelly, J. (1995): The rise of international ethics. The Caux Round Table. Principles for business. Business ethics. Williams, (2006): Global codes of conduct. An idea whose time has come. Notre Dame, Ind. University of Notre Dame Press. Winston, M. (2002): NGO strategies for promoting corporate social responsibility. Zadek, S. (2001): The Civil Corporation. The New Economy of Corporate Citizenship. Earthscan. The Copenhagen Centre. Copenhagen. Zadek, S., Hojensgard, N. &Raynard P. (2001): Perspectives on the new economy of corporate citizenship. The Copenhagen Centre. Copenhagen. Read More