Ben Westcott about the Risks and Challenges - Assignment Example

Ben Westcott about the Risks and Challenges Outsourcing Description In his article on outsourcing, Ben Westcott elucidates the risks and challenges often experienced by companies that outsource. Fire broke out at a garment plant in Dhaka Bangladesh claiming the lives of over 100 employees, who had underwent intolerable working conditions, leaving Wal-Mart, the American retailer, which had outsourced its production to the company to answer several questions. The media, customers, and shareholders all impugned Wal-Mart for its failure to pay close attention to the operations of its supplier. Analysis While the author does not offer a candid explication or rather the costs and benefits of outsourcing, he reiterates the sheer fact that companies that outsource are often petulant of the suppliers’ demands which are deemed too high. Just like Westcott (2012, 1), I believe that irresponsible outsourcing can be detrimental to a company’s reputation. “Major companies, ranging from Apple to Nike, have suffered a backlash… when it has emerged that their workers are not well treated in some of their supplying companies” (Westcott2012, 1).Considering that a company’s reputation determines its competitiveness, companies must ensure that they outsource responsibly to circumvent scandals and exploitation. Companies that have outsourced successfully and lived to enjoy its benefits “…work closely with those other companies to ensure that their standards and working conditions are the same high level that they themselves would wish to prevail”(Westcott 2012, 1). Reading through the article, I could easily relate the Dhaka fire incident with a scenario which happened in early 2000s when Apple was sued after it outsourced to companies that employed underage children to work in its factory. Inconsequential as it might sound, it was an unethical act which cannot be tolerated in the currently highly competitive corporate world and Apple really disappointed its loyal customers and shareholders by outsourcing to such a supplier. Learning Several exceptional lessons stood out from the article. Firstly, outsourcers should build a better relationship with the external contractors. They external contractors, as well as the outsourcers, must understand the demands and expectation of each other. Through this, guidelines and standards will be developed and enforced, an act that furthers innovation and motivation which eventually improves the company’s products and effectiveness. Moreover, the external contractors are on the ground hence are acquainted with the constantly changing customer tastes, needs, and preferences. An organization should, therefore, conscientiously look after its workers/suppliers and communicate with them to fulfil consumer demands(Westcott 2012, 1). Apparently, many companies have been disadvantaged in their efforts to outsource since they majorly concentrate on cutting costs. However, I strongly believe that companies must understand that high costs often results in high benefits since reduced costs often imply compromised quality. Given a chance, and drawing expansively from the above scenario, I would strive to create a long-term mutual relationship with the contractors and extensively inform them about the expectations of my company, particularly the ethics aspect which is becoming extraimperative in today’s corporate world. Ethical procurement Description Fuji Xerox, a joint venture between the American company Xerox and the Japanese Fuji Photo Film Co., launched an ethical procurement plan in Korea, Japan, and China in 2007. The ethical procurement plan was launched after Fuji Xerox’s customers asked the company to provide sound labour management practices at its manufacturing facilities as well as to improve the company’s products through Fuji and its suppliers business, environmental, and social ethics. Following the implementation, the number of suppliers who met Fuji’s compliance level increased by 27.5% to 72.5% in 2008 and in 2009, it rose to a whopping 96.9% (United Nations Global Compact 2015, N.p). Analysis Apparently, Fuji Xerox intended to ensure that its raw materials are procured from ethical companies or parties, a factor evident in how it strived to ensure that its suppliers have aprincipled CSR management practice(United Nations Global Compact 2015, N.p). Fuji checks the issues of their specific partners and discussesprobable solutions that contribute towards the improvement of their products. Through the ethical procurement program, the company obviated buying of environmentally detrimental materials, its understanding of the suppliers increased, and the company’s status improved. Apparently, the article suggests that making ethical procurement a component of a company’s brand creates value. We live in a tech-savvy society where various countries contract online through platforms like the social media, a factor that has changed the face of procurement. In the recent past, buildings have collapsed causing loss of life and destruction of property. The 2013 breakdown of the Savar building in Bangladesh where 1000+ people died and 2500+ injured is a good example. In such occurrences, people often attribute the tragedy to a faulty procurement process. The mere headline that an organization has engaged in unethical procurement is enough to reduce the organization to nothingness, a more reason why managers must ensure that their companies are not associated with such practices. Learning Through the article, I got to learn that due to augmented consumer conscience and the proliferation of the social media, consumers are presently willing to let their money support only those companies that act ethically including creating a friendly environment(United Nations Global Compact 2015, N.p). Hence, a company that procures after conducting a thorough process audit has higher chances of pasting competitors. As a business professional, I will ensure that my company stays on top of potential disruptions to the supplier chain by closely working with other procurement officers and enhance the company’s reputation by ensuring that all purchasing processes are made public and competitive. From this discussion, such ethical procurement will ensure that consumers and shareholders are aware of the procurement process thus thwarting procurement from negligent parties or suppliers. The content presented in the article has further brought to my attention the need to include all suppliers during the purchasing process, and allow all stakeholders to contribute in terms of ideas. This, I believe, will ensure that unscrupulous business practices that can potentially torpedo the ethical procurement process are thwarted. Bibliography United Nations Global Compact.2015. Fuji Xerox Ethical Procurement Program. Supply Chain Sustainability Resources & Practices - The UN Global Compact. http://supply-chain.unglobalcompact.org/site/article/52 (Accessed May 28, 2015). Westcott, B. 2012.Is Your Company Outsourcing Responsibly?| SmartCompany."SmartCompany.com.au. http://www.smartcompany.com.au/leadership/strategy/39163-is-your-company-outsourcing-responsibly.html(Accessed May 28, 2015). Read More