Topic Proposal (topic of paper to draw from and use. REQUIRED.)

In today’s bussiness world, every company is trying to find new ways in which to reduce costs and maximize profits. Because of this, supply chain (logistics) is one of the main advantages that organizations choose to exploit as it has the most room for flexibility. Procurement within logistics is a specifically beneficial function that can be used to limit capital investment into inventory and raw materials. However, when dealing with external suppliers, organizations do not have total control of operations within the outside agencies, and thus ethical issues can arise. In the paper, we will discuss the nuances of procurement within the supply chain, what harm can be caused by a supply chain, and what the best ways that organizations can help to combat damaging logistics practices that are detrimental to global survival of natural resources as well as human rights on a global scale.

One of the issues that organizations have sourcing their materials, is the local in which these organization purchase their materials. The emissions that are caused by logistical functions that transport raw materials can be exorbitant, as 68% of the emissions in the globe have been known to have been caused by commercial ship liner industry (Mansouri, Lee, & Aluko, 2015).  Furthermore, due to long transit times of perishable goods, over 6000 tons of food and medication is spoiled before reaching its final destination (Lazarides & Goula, 2017). Berti & Mulligan (2016) point out that finding local suppliers of materials can help to reduce the impact to the environment on multiple levels, however profitability may be affected if the goods are more expensive than their regionally disbursed counterparts. Nestle built a factory in Vietnam in order to strategically place a manufacturing plant in order to reduce transportation cost and time of transport, which has the secondary effect of reducing the risk of spoilage and emissions created from distribution (Mai, 2015).

Another key aspect to selecting a vendor for procurement within the logistical network is the bussiness practices of the agencies that you do not control. Simangunsong, Hendry, and Stevenson (2016) detail how Apple has a vast supply chain, yet a multitude of their suppliers practice unethical labor practices such as low pay, hazardous conditions, as well as long and hostile working hours. On that same note, materials that are procured through the jewelry supply chain (especially diamonds), have been under high scrutiny as large portion of the manufacturing, sourcing, and transporting of the product is filled with corruption and soaked with “blood” (Bockstael, 2018).

Companies have a moral imperative to screen the companies that they procure from, to ensure that the goods that they are receiving come from a company working within the values in which the organization wishes to hold (Quarshie, Salmi, & Leuschner, 2016). However, does a company have to sacrifice profits and market share in order to ensure they have the most ethical and sustainable supply chain as possible? Or does an organization have a moral imperative to turn profits and growth in order to continue to operate at a steady rate? The balance is the key.

 

 

 

 

 

 

 

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