Global supply chains refers to the movement of products and services across various destinations for processing and marketing. The flow of raw materials, the inventory management system like storage systems, and the distribution from the original locations to the point of consumption are processes involved in the worldwide operational systems. Managing these activities has taken a complex approach with companies developing cost-cutting strategies within their operations. Sun, Michael, and Kamel (2016) aver that the effective application of outsourcing processes reduces the operational costs of companies. The competitive environment occasioned by players in the technology sector like Apple, Samsung, and Huawei among others, has influenced the exploration of competitive labor markets across various offshore destinations aimed at reducing their operation expenditures. In their quest to cut management overheads, companies have exploited various labor options and models that reduce inventory costs, leading to human labor exploitation and the non-observation to occupational and safety standards at the workplace.
Inexpensive sources of material is a factor that influences global outsourcing systems. Majority of companies are implementing the globalized approach to labor, supply chain, and distribution systems. Large companies like Apple and Samsung operating within and outside the United States are outsourcing their services to partner firms in developing nations like Taiwan, Czech republic, and other countries with relatively competitive labor markets such as China (Sun, Michael, and Kamel, 2016). For example, material suppliers for the Apple Company are based in Japan, Ireland, and Korea among other nations, creatinga stronger business partnership (Sun, Michael, and Kamel, 2016). According to Beckert (2015), companies endeavor to justify the application of competitive supply chain systems by negotiating for cheaper markets through material and labor outsourcing. Firstly, companies are developing preferences to process and import finished products from offshore companies instead of importing raw materials for processing in their mother factories. The reason for such a strategy is to avoid import duty costs that may accrue to their headquarters. Secondly, organizations have developed partnerships with local firms in developing countries for warehousing, inventory, and distribution logistics, which are relatively cheap, compared to the rate in their head offices. Thirdly, the availability of highly qualified labor at competitive rates informs the preference of multinational corporations for offshore operations. To ensure companies manage their operations effectively and attain their projected milestones in regards to growth and profitability, the preference for a cheaper offshore solution like labor markets, material acquisitions, warehousing and inventory management system has significantly gained approval in many organizations.
Therefore, as companies endeavor to seek cheaper operational frameworks and attain competitive adavantage , employees have been the greatest victims. Several companies have made preferences for countries with weaker regulatory frameworks to take advantage of cost cutting measures. For instance, according to Brian (2017), the transition of the Apples from Foxconn Company to Pegatron was influenced by the ability of the latter to produce cheaper versions of the iPhones 5 series. Notably, Foxconn was demanding for a 1.7% markup on its entire operations while Pegatron demanded meagre margin of 0.8%, but still projected to gain profitability (Sun, Michael, & Kamel, 2016).
In addition, employee protection has been inadequate on the agenda of global outsourcing systems. The strategies adopted by the companies have empirical focused on growth and profitability. The case point of protecting British manufacturers from Indian competition and the struggles to caution the U.S. by opening up market access in areas like Latin America as contained in the excerpts of to The primary concern of the employee on the digital stage is on effectiveness of the labor and occupational safety standards implemented through recognizable labor regulations that cut across all global jurisdictions. Employees continue to be affected by poor working conditions and low motivational levels as companies continue with the models to reduce their operational costs.
It is worth noting that the circumstance surrounding the death of Foxconn’s employee is a significant example that elucidates the levels of frustrations faced by workers in the business-to-business outsourcing arrangements. The reports by the guardian newspaper where more than 18 personnel under contract between the Apples Company and Foxconn are reported to have committed suicide due to job related frustrations portrays failure to manage worker’s interest (, 2017). Similar incidences of mishandling employees are reported by (2016), who demonstrates how China impresses oversea companies to invest through outsourcing through better taxand tariffs as well as improved supply chain systems. Therefore, China’s main objective is to developea giant technological system that improves GDP and supports global outsourcing with little regards to labor relations.
Evidently, the technology sector is fast gaining root in company’s manufacturing and production departments. Firms are targeting swift and cost effective measures in their material acquisitions, logistics, and distribution systems to attain growth. To ensure the attainment of operational indicators, companies are focusing towards destinations with highly skilled and relatively cheap labor. As a result, product quality has been achieved globally but with ethical concerns and labor abuse. Therefore, it is incumbent upon the global consumers and stakeholders, including governments and the media to investigate such abuses and charge them on products retailed in the market. products developed from such backgrounds should be boycotted at the marketplace.
References
Beckert, S. (2015). Empire of cotton: A global history. New York, NY: Vintage.
(2017, June 18). Life and death in Apple’s forbidden city, The Guardian. Retrieved from https://www.theguardian.com/technology/2017/jun/18/foxconn-lifedeath-forbidden-city-longhua-suicide-apple-iphone-brian-merchant-one-deviceextract
(2016, December 29). How China built ‘iPhone city’ with billions in perks for Apple’s partner. The New York Times. Retrieved from https://www.nytimes.com/2016/12/29/technology/apple-iphone-china-foxconn.html Sun H. L., Michael J. M., & Kamel M. (2016). Apple and its suppliers: Corporate social responsibility
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