supply chain

The creation of a slavery and human trafficking statement is now compulsory for all UK businesses with a turnover of over £36m, as stated by the Modern Slavery Act. However, unless enforced, this already diluted piece of legislation will have little effect on working practices and is open to abuse.

Modern slavery, although widely condemned as morally indefensible by UK businesses, is still rife in global industry. The International Labour Organisation estimates that over 20m people are trapped in a form of slavery worldwide, a view reinforced by countless exposés of the abhorrent working conditions present in western supply chains. Just last year, a report by NGO Verité suggested that a third of migrants working in Malaysian electronics factories were subject to forced labourRead more

By Olly Buston and Peter Nicholls

Many people think that slavery ended with the demise of the barbaric trans-Atlantic trade 150 years ago. But modern forms of slavery still exist. According to the Global Slavery Index, an estimated 35.8m people are victims of forced labour, human trafficking or debt bondage, more than at any other moment in history. That’s 35.8m people who are more or less completely controlled by another for their use or profit. An astonishing two thirds of these people live in the Brics economies of Brazil, Russia, India and China, with 14m people living in slavery in India alone.

The International Labour Organisation estimates that $150bn of illegal profits are generated each year by the use of modern slavery worldwide. One third is made through forced labour. The reality is that slavery exists in the supply chains of many of the products that we consume. This means consumer pressure has a major role to play in defeating this terrible crime. Read more

Thinking of investing in India? There is one sector you may have overlooked: agriculture.

With its growing population, rising income levels and growing middle class, India has attracted the usual investment suspects of retail, aviation and FMCGs. But although it may not be glamorous and it may be politically complicated, India’s agricultural sector is set to expand fast. Read more

Free trade warriors: stop wasting your time on battling trade tariffs from emerging markets. Streamlining your own supply chain is what you should focus on.

That is, in short, the message of a new WEF report, Enabling Trade, released this week in Davos. Read more

When Apple’s share price gets slammed 10 per cent, its suppliers should all suffer too, shouldn’t they?

Well, not quite. On Thursday, Apple’s disappointing results led to some falls in its suppliers’ share prices. But none was hit as hard as Apple, and some even rose. Read more

With major EM economies slowing in 2012, regional heads of multinational companies are increasingly having to focus on their margins. As new research from the Frontier Strategy Group shows, many are considering boosting them by running some of their own distribution operations. Read more

A mere eight months since flood waters receded from Thailand’s capital, there is once again fear in the Kingdom that history is being repeated.

Last year the World Bank estimated that the cost to Thailand’s economy of severe flooding was approximately 1.4tn baht ($46bn). In the last few days, much of the north of the country has been inundated and as high water advances towards Bangkok the government has issued warnings to urban residents. Read more

Those bored with ordinary milk – healthy but uninteresting as far as drinks go – might want to try the Chinese variety. Laced with kidney-ravaging toxins, harmful bacteria and carcinogens, milk in China is anything but dull. Drinking it is a high-risk activity.

That at least is the impression from the latest scandal to hit the country’s beleaguered dairy industry. But there is some room for optimism. Read more

Serious safety concerns have emerged at another Chinese factory supplying Apple after a weekend explosion in which local media said dozens of workers were injured. The blast on Saturday happened at a metal casing factory owned by a subsidiary of Pegatron of Taiwan, a major main metal casing supplier and a contract manufacturer for Apple products. Read more

As the waters recede following the worst floods in Thailand in 50 years and the clean-up operation gets underway at a number of inundated industrial estates, the full scale of the impact is only now coming into full view.

Thailand’s industrial production index slumped by 35.8 per cent in October after several thousand factories were swamped, sending shockwaves through the global supply chains of the hard-disk drive and automotive manufacturing sectors, which have concentrated production in the south-east Asian nation. Read more

After working its way down the computer supply chain for weeks, the impact of Thailand’s disastrous floods has reached one distant end point: the US consumer.

As Americans prepare to go holiday shopping, at least one Costco store in New Jersey is restricting sales of hard disk drives due to the “significant supply reduction” caused by flood damage at Thai component makersRead more

As central Bangkok residents brace for possible floods and many factories north of the Thai capital remain under two metres of water, investors are starting to ask whether the worst floods in 50 years will damage the country’s prospects as a major global manufacturing base.

Japanese car makers like Toyota and Honda and electronics manufacturers from Sony to Western Digital, the world’s leading maker of hard disk drives, have warned that production will suffer because of the floods, which have inundated an area the size of Switzerland and killed more than 340 people. Read more

As the Japan earthquake and tsunami showed, supply chain disruptions could come in all shapes and sizes. Here’s a new risk for the technology industry: China is getting serious about tightening its environmental regulations.

In an emergency announcement on Sunday night, Taiwan’s Catcher Technology (2474:TAI), one of the world’s biggest makers of metal casings for notebook PCs, said it had been ordered to close part of its plant in China’s eastern city of Suzhou by regulators, after local residents complained of bad odours generated by the plant. Read more

It’s been nearly two months since Japan was hit by devastating earthquake and tsunami. Yet the fallout is only being felt now 9000 kilometers away in Hungary.

In another example of how increasingly complex and fragile the global supply chain has become, Magyar Suzuki, the Hungarian arm of the Japanese auto maker, said it has to move from double to single shift working this week as the supply of parts – including key electronics components – from factories in Japan affected by the disaster dries up. Read more

Short-term, Japan’s key position in the global manufacturing supply chain is under threat from the disastrous earthquake. Longer-term, the challenge comes from rising competition from east Asia’s emerging economies.

The chart of this week (below the break) shows the importance and the growth of the export of components in East Asia. Japan is the second largest exporter of intermediate goods in east Asia after China – and it is still the first for the export of precision machineries components. But with the value of its exports rising much more slowly than in the rest of the region, Japan is losing export share. Read more

In the days immediately after the Japan earthquake, there was great concern of a worst-case scenario of severe disruption to the global technology supply chain that would halt or severely delay production of computers, smartphones or – horrors of horrors – the iPad 2.

Now more than a week later, it is still difficult to quantify the exact toll the quake will exact on tech production. But a somewhat clearer, and more measured, account of what is or is not under threat is emerging. And, thankfully, the situation for now looks to be not as dire as many people originally thought. Read more