Sanlu Q3

Q3 
What is the role of ethics in supply chain management?

Definition of Supply Chain Management

The network of retailers, distributors, transporters, storage facilities and suppliers that participate in the sale, delivery and production of a particular product. Besides, SCM can let an organization get the right goods and services to the place they are needed at the right time, in the proper quantity and at an acceptable cost.

Ethics in Supply Chain Management

Nowadays, society is concerned more about ethics within supply chain management in different aspects, and mainly in three aspects. The first one is the environmental effects. Public will concern about the treatment plants of water, treatment of solid waste and gases etc. The second one is the health and safety. Public will concern about the uses of pesticides, hormone-treatment of animals. And the last one is the consumer rights. Public will concern about the legislation about the right to safety, right to choose and the right to be heard.

For a company, there are three responsibilities for them to define the ethics process. The first one is the economic responsibilities to supply the right products and right services to their customers but not only think about the profit. The second one is legal responsibilities that those companies should obey the laws to perform the only right things. The last one is the ethical responsibilities that those companies should conduct business in a way that is morally consistent with the beliefs of society.

In the Sanlu case, different parties have the duties to perform supply chain management ethically

Retailers (Sanlu)

They need to ensure the quality assurance management has been done well. In fact, they need to ensure more on quality than on the price of the products. Also, they should ensure high visibility in the supply chain. Besides, they can hire more talented people with the high moral standard to ensure the steps have been done ethically.

Government

In order to strengthen the regulations and enforcement, they should launch a food recall system. If a food manufacturer becomes aware of a defective or unsafe product, he/she must halt production and sales. Then he/she will notify vendor and customers, report problem to AQSIQ and other quality control authorities. Otherwise, if the producer do not recall those problem products, the government will order a recall. This system can ensure those problem products will not sell to customers, and can ensure the quality of the products.

Social Media

When they discover some unethical cases of a company selling problem products or low quality products to the public, they should not hide the fact. They should report the truth to the public at the earliest.

Consumer

Although consumers may not have enough knowledge to distinguish whether a product is good quality or not, they should do more research of a product before they really buy it. They should try understand more on the product, to make sure they are buying a good product. Also, consumers can rather do a research of the company. As they can know the operation of the company, and even the best practices of the company, they can analysis whether it is worth for them to buy those companies products.

References:
Sanlu PDF
http://en.wikipedia.org/wiki/Supply_chain_management