Apple's Cook bets on transparency to damp supply chain flap

Apple's Cook bets on transparency to damp supply chain flap

Summary: Apple CEO Tim Cook's bet appears to be that supply chain metrics on working conditions can lead the tech industry.

SHARE:

Apple CEO Tim Cook is betting that monthly updates on hours worked, audits and focus on firing offenses like hiring underage workers will limit any damage from an emerging supply chain controversy.

Cook, speaking at a Goldman Sachs investment conference, reiterated that Apple "takes working conditions very seriously." The company on Monday outlined a plan to allow the Fair Labor Association to audit its facilities.

"Many top executives and managers visit manufacturing facilities," said Cook, who noted he's worked in production plants too. "We're closely connected to the production process and understand it at a granular level."

Related: 'Think Fair' - Has Apple opened a new front in competitive battles? | Apple's external inspections of Foxconn a good first step | Apple’s supply chain flap: It’s really about usCNET: Tim Cook: Apple cares about ‘every worker’ in its supply chain

Cook's bet appears to be that this granular understanding coupled with metrics and a public dashboard can lead the tech industry and improve working conditions in China.

"Transparency is so important," said Cook. Indeed, the company is aggregating overtime and hours worked for workers abroad. In January, Apple tracked weekly hours for 500,000 workers. Eighty four percent of suppliers complied. "We can do better," said Cook.

See: Debate: Do happier Chinese workers spell the end of affordable tech gadgets?

Cook added that this dashboard is an unprecedented step and will be reported on Apple's Web site.

The big question is whether this transparency will work. On one hand, Apple's supply chain reporting can tone down complaints by industry observers. However, Apple could open itself up for more criticism. Apple's bet is that it will get ahead of concerns about working conditions by leading the tech industry in disclosure.

It remains to be seen if a) other tech companies will follow and b) whether Apple can avoid additional scrutiny.

Topics: Enterprise Software, Apple, CXO, Software, IT Employment

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Talkback

13 comments
Log in or register to join the discussion
  • What I have to say about Apple

    is that they post their Audits where anyone can access them quickly and easily, right on the front page.

    Ever look for HP, Dell, or Lenovo's audit reports? They don't exist. They refer to being members of EICC, again this organization hasn't posted any findings that I can see. Some reports that make it seem like they are doing something, but no hard publicized data. Makes me wonder what they are trying to hide. Maybe they do perform audits, but they certainly aren't providing them for all the world to see.
    Snooki_smoosh_smoosh
    • I'll wait and wonder

      @Snooki_smoosh_smoosh
      on just how accurate, complete and transparent these will be.
      If this was SJ I would chuckle and ignore as they would be twisted or not at all.
      TC just may do the right thing here to help drive change.

      We'll see and here's to hope.
      rhonin
    • RE: Apple's Cook bets on transparency to damp supply chain flap

      @Snooki_smoosh_smoosh<br>You didn't see those audit reports because you're either lazy or lying : <br>HP:<br><a href="http://www.hp.com/hpinfo/globalcitizenship/society/supply_chain_responsibility.html" target="_blank" rel="nofollow">http://www.hp.com/hpinfo/globalcitizenship/society/supply_chain_responsibility.html</a><br><br>Dell:<br><a href="http://content.dell.com/us/en/corp/d/corporate~corp-comm~en/Documents~dell-fy11-cr-report.pdf.aspx" target="_blank" rel="nofollow">http://content.dell.com/us/en/corp/d/corporate~corp-comm~en/Documents~dell-fy11-cr-report.pdf.aspx</a><br><br>Microsoft and HP probably are the most comprehensive in terms of involvement in global citizenship as they the supporting member of Nethope. They have a tag team that will bring equipments to disaster zone and setup communication center for local authorities. The best Apple ever done so far for global citizenship? Setting up donation account in iTunes. seriously, Apple by far has the worse record of GZ in terms of tech company of this size.
      Samic
      • RE: Apple's Cook bets on transparency to damp supply chain flap

        @Samic
        Thanks for the links.
        The HP report is much more relevant than the Dell report which is almost wholly concerned with environmental matters and barely mentions worker conditions or the steps they are taking other than a bland figure of 100 audits having been conducted in 2010 across all the sections of the report. Which might mean as few as 10 audits of working conditions proportionately. HP at least more open about its methods of auditing and contains far less 'corporate speak'.
        Neither of the above contain the depth of information available in the Apple Audit Report. Apple's document contains individual audits and core violations found. We should all push for a similar level of transparency from our favourite brands.
        frogspaw
      • RE: Apple's Cook bets on transparency to damp supply chain flap

        @Samic <br>Thanks for the reports. The work on Nethope (I can attest first-hand) is good and important but is unrelated to supply chain scrutiny. <br>I feel it is a pity that supply chain scrutiny for ethical working conditions might be lumped into 'exceptional' volunteering situations such as disaster response. The first one is an obligation (moral) of doing business; the latter is arguably a more optional part of a company's mission. I just say it because you see a lot of spin in companies that try to frame them together as charitable activities ("we may have lousy supply chain practices but hey, we donated to breast cancer this year!").
        Anonymous45
    • What I have to say about HP, Toshiba, etc.

      If we are going to discuss the working conditions at Foxconn, shouldn't we include all the companies that contract them?<br><br>We now know how Apple plan to protect Foxconn's Chinese workers, who make Apple, HP and other products.<br><br>When will we hear from HP about their plans?
      StandardPerson
  • That reduces part of the attraction of outsourcing

    I've long suspected plausible deniability of being one of the prime motivations.
    John L. Ries
  • Time Will Tell

    We can only wait and see if what Apple is doing will make a difference, and if it continues on to allow the Chinese slave laborers more say in their work environment - instead of being sent to a Gulag for speaking out. Of course you are also dealing with a Communist gov't, which does not exactly have a history of being worker friendly. The corporations can only do so much. The Chinese gov't and people have to step up to do their part too.
    jpr75_z
    • RE: Apple's Cook bets on transparency to damp supply chain flap

      @jpr75_z <br>I think it may be more useful to remember Apple (and other tech companies using Foxcon et.al.) are dealing with a Chinese government. The concept of 'face' is in play. Injustice itself matters less in their culture than being seen to be unjust. This characteristic is Chinese at least as much as it is communist. And as a Chinese characteristic it has a much much longer history. <br><br>Apple's focus on open, frequent, continuous transparency (monthly audits, every month, right on the home page...) may be the most effective tool available to influence behavior of these Chinese companies and of the Chinese Government. Apple products are incredibly popular inside China as well as around the world. When Apple puts audit results on their homepage they are sticking it right in the face of both Foxcon and the Chinese Government. What can the Chinese do? Block the Apple homepage? I don't think that would fly. They lose face if they block the 'visibility' and they lose face if they don't fix the problem. This may be the best, and possibly only way to get the attention of companies and government in a 'face' centered culture like China. <br><br>Apple is in a unique position to carry this out due to their extreme popularity and high profile both within China and in the world at large. When Apple puts this issue into the open and persistently keeps it there the only way the Chinese have to make their 'face' problem go away is to make real, substantive changes. Tim Cook knows the orient. He's committed to fixing this. And, it shows.
      z2217
  • What most are failing to see here...

    Is that Apple can put itself in a situation and push the blame to the manufacturer themselves because they can squeeze the living daylights out of them margin wise, which is EXACTLY what they are doing. They will never reduce the margins they are making off of these companies to do anything like improve conditions, they will leave that up to the manufacturer, that way, they can pass the buck.

    If you really think Apple will change out a supplier like Foxconn, well, then you are probably also dumb enough to be an Apple sheep and sit here on forums like this and defend them.

    Apple is the icon of American arrogance and greed, and yet, they will most likely remain successful because it has been proven time and time again you will never go broke fleecing the stupidity of the American public!
    omdguy
    • RE: Apple's Cook bets on transparency to damp supply chain flap

      @omdguy has characterised various groups of people as follows:

      Apple - "icon of American arrogance and greed"
      Apple's customers - "dumb sheep"
      American public - "stupid" people who are ripe for "fleecing"

      While this evidence-free rant is merely tedious, I do wonder whether omdguy views (say) HP and HP's customers in the same light; or is Apple somehow different?
      StandardPerson
    • RE: Apple's Cook bets on transparency to damp supply chain flap

      @omdguy
      Whereas 'you' are far too stupid to get caught by Apple, right?
      frogspaw
  • RE: Apple's Cook bets on transparency to damp supply chain flap

    Much ado about nothing, as usual. "Underage" workers is a government euphemism, meaning, we are going to dictate to you who can or cannot work.

    I say, let the employer and the employee decide. The consumer's role is to choose whether to purchase or not. The government's role is to ensure the liberty of the individual, not the dictatorial demand that you are too young to work, that you can't think for yourself, that you can't determine whether an employment position is desirable for you or not.
    clifftrapp