case study Imagine you are the procurement manager for the fastest growing fashi
ID: 391818 • Letter: C
Question
case study
Imagine you are the procurement manager for the fastest growing fashion company in Australia. You source production from a range of countries including Bangladesh, Cambodia and China. The senior management team are becoming increasingly concerned with the ethics and sustainability of production and want to make this part of the company’s reputation and business model.
One morning your communications manager walks into your office to inform you of a big problem. The Guardian newspaper has run a story that morning about mass faintings in the main factory you source from in Cambodia. Your company’s name is mentioned a number of times in the article as the number one procurer from that factory. The report notes that around 70 women fainted last week, with mass faintings becoming a frequent occurrence. The article quotes from one of the women in the factory who had fainted. She says she regularly feels weak and dizzy at work. The factory’s cooling system does little to reduce the temperatures in the sweltering hot building, she says, and she is perpetually hungry, thirsty and stressed on the job.
“Everyday is more and more difficult. The managers say they are losing profits and they have given us higher quotas,” she says. “Sometimes I can’t sleep at night because I’m so frustrated about work.”
You conduct investigations about these faintings to find out how much the company knows and what action has been taken in the past. You find that your company was alerted to mass fainting of workers in its supply chain factories previously.
With regard to actions taken by your company in the past, your predecessor had asked the factory manager to investigate the causes and address these issues. However, the factory manager had replied that this was not possible within the current production budget. That budget is determined by the cost per unit paid by your company for the orders.
questions to answer
1.Your immediate media strategy (as procurement manager)
2.Your company’s new ethical procurement strategy which will ensure that you fix the problem long-term.
Explanation / Answer
1. The immediate media strategy can be a mass apology stating that it was a loophole on the part of the company that they missed out on the work conditions of the factory. Accepting the fault honestly helps in maintaining the brand image of the company. The media strategy must include the plan of action that the company has proposed to improve the work conditions of the factory. Short-term objectives must be included in the press release, so as to assure the public and regulatory bodies that the company is working on eradicating such practices. The long-term objective will be a part of the company’s business strategy. The short-term objectives may include:
2. The new ethical procurement strategy will come under the long term objectives of the company. The strategy will be developed in a way to facilitate the work conditions of workers associated with the company. The strategy must be in alignment with the Labor laws and factory laws of the region. A team of company representatives need to be on the factory till the corrective measures have been implemented. It will be their job to make all workers aware of such measures. A independent committee will be set up for grievance handling of the workers. This committee will listen to the grievances of the workers unbiased manner and will work to come up with solutions in a very short TAT. Regular audits must be conducted to check compliance adherence and identify the lingering problems faced by the workers in factories. The company can come up with innovative CSR activities to uplift the life of workers associated with the company. These activities will be initiated to make lives better of the workers as well as their children and families
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