What is a Supply Chain?

1. What is a Supply Chain? CREA 2011

2. Definition of a Supply Chain • The process by which a product is assembled from component parts and brought to market • The process by which a an agricultural product is brought from where it is grown to the market • Each process can have many steps

3. Supply chains for each commodity are different, are unique to the product • All supply chains have some things in common

4. Complete view of a supply chain: • Raw materials • How materials are processed • How the processed materials become components of the final product • All the processed materials needed for a final product

5. For a Shirt Cloth Thread Buttons Zippers Cutter Sewer Packager Transporter Distributor Seller

6. For a computer Wires Case Motherboard Chips Etc. Minerals Metals Plastic Etc. Miners Smelters Assemblers Etc.

7. The point is • It is not enough to have the raw materials • Or even the processed materials • People are key to any supply chain; Without men and women working, supply chain s do not function

8. Supply Chain vs. Value Chain • Supply chain focus: Bringing product to market • Value chain focus: Where can profit be made

9. Supply Chain General Language • Vendors or agencies • Contractors • Sub-contractors • Suppliers • Tiers

10. Codes of Conduct = Standards set for the Workplace Based on Country Law International Standards including the Core ILO Conventions Company’s Code RULE: For each issue, whichever is the highest standard applies

11. Country Laws Many countries do not have laws addressing workplace safety and worker’s rights Even if they do have laws on the books, enforcement system can be weak or non-existent

12. Core ILO Conventions C-29 Labour Convention, 1930 C-87 Freedom of Association and Protection of the Right to Organize Convention, 1949 C-98 Right to Organize and Collective Bargaining Convention, 1949 C-100 Equal Remuneration Convention, 1951 C-105 Abolition of Forced Labor Convention, 1957 * C-111 Discrimination (Employment and Occupation) Convention, 1958 C-138 Minimum Age Convention, 1973 C-182 Worst Forms of Child Labor Convention, 1999 * NOTE: US has only ratified C-105 and C182

13. Company Codes Basic Topic Requirements • Compliance with All relevant laws • Working hours • Compensation • Child and Juvenile Labor • Forced Labor • Harassment and Abuse • Contract Labor • Freedom of Association and Right to Engage in Collective Bargaining • Environmental Management • Anti-discrimination statement

14. Difference • Between Codes or Standards for Direct Employees • Codes for Workplaces in Supply Chains It is not either/or…….the magic word is AND BOTH are necessary

15. 2 Basic Formats • The Code is succinctly stated with an application manual provided which expands on the code • The Code and application manual are provided in one document Both are fine as long as the necessary components are in the materials

16. Code Examples to Read Gap – Code of Vendor Conduct http://www2.gapinc.com/GapIncSubSites/csr/ EmbracingOurResponsibility/Governance/Gov_COVC.shtml Target Code of Vendor Engagement http://sites.target.com/site/en/company/page.jsp?contentId=WCMP04-034203 Walt Disney Company Try searching on the internet for the code of companies in which you are interested. Codes should be easy to find. http://corporate.disney.go.com/citizenship/codeofconduct.html