Counterfeit Drugs Enter the Pharmaceutical Supply Chain

According to the article “Secure The Pharmaceutical Supply Chain From Risky Counterfeiters,” leading members of the House and Senate have proposed a legislative draft to establish a national ‘track and trace’ program for prescription drugs. The Food and Drug Administration has been dealing with an increasing number of cases involving counterfeit prescription drugs. In 2010, the FDA’s Office of Criminal Investigation opened 72 cases involving fake drugs. This is highly problematic for the pharmaceutical supply and very risky for the health of individuals. Some of these cases have involved counterfeit Adderall, Vicodin, Xanax, flu medicine, and cancer drugs. One reason counterfeit drugs are able to enter the nation’s pharmaceutical supply chain is the contradicting state regulations that are in place. Each state has varying compliance rules. There is not a federal level system in place, and the FDA does not have the authority to implement federal standards that can ensure the authenticity of prescription drugs from the manufacturer into the hands of prescription drug users.

In order to combat the introduction of counterfeit prescription drugs into the nation’s pharmaceutical supply chain, there needs to be compliance standards at the federal level put into place. The ‘track and trace’ program proposed by members of the House and Senate calls to rid of the contradictory state regulations and increase the security of the pharmaceutical supply chain by setting up countrywide standards. Many industry participants, such as manufacturers, chain drug stores, wholesalers, and distributors, have expressed their support for this proposal.

A downside to this national ‘track and trace’ system is that it will be more costly for pharmaceutical companies. The high compliance costs that the pharmaceutical companies may incur could cause these companies to decrease operations, limit distribution, or even shut their doors entirely. More supply disruptions and drug shortages could occur as a result of the higher compliance costs. However, complying with the regulations of each of the individual states can also run costly for this industry as well.

Although the proposal for a unified national system of security for prescription drugs that Congress is putting forward may be costly, it would ensure that patients are receiving legitimate prescription drugs instead of counterfeit ones. This ‘track and trace’ system, when implemented at a national level instead of state-by-state, may be more cost effective in the long run.

A uniform system for the national pharmaceutical supply chain would decrease the ability for counterfeit prescription drugs to enter and be distributed to patients. Even though it could impose higher compliance costs for this industry, the benefits of ensuring safety for prescription drug users cannot be ignored.

Do the costs of implementing a uniform system for the pharmaceutical supply chain outweigh the benefits? Or do the benefits of a uniform system outweigh the costs?

 

Sources:

Article: http://www.forbes.com/sites/gracemarieturner/2013/05/20/secure-the-pharmaceutical-supply-chain-from-risky-counterfeiters/

Image 1: http://www.recyclemorewisconsin.org/wp-content/uploads/2013/01/Medications.jpg

Image 2: http://www.drugsno.com/wp-content/uploads/2011/05/bigstock_Bottles_Of_Medicine_16441621.jpg

Are Corporations Our Personal Shoppers?

The thought of ordering an item online and receiving it the same day, just a few hours later seems unrealistic. With technology becoming more integrated in our world and the demand for instant gratification, this unrealistic idea is now a reality. Major corporations like Wal-Mart, Amazon, and EBay have adopted this new service of same-day delivery. It is really testing the limits of supply chain management, and now a whole new look on logistics is being placed in the hands of these corporations.

walamrt  Wal-Mart , is sitting at an advantage because of its massive fleet of stores across the country. They use their 4,005 locations as inventory holders and distribution centers, so now when you order something before noon you can receive it by that evening. Workers will literally go down the aisle and collect the item you want, which is later delivered to your door. Even though this service is only in the test phase in five major cities, Denver, Philadelphia, Minneapolis, northern Virginia and San Francisco/San Jose, it has proven to be a huge success thus far.

Amazon has a new technology that now sends your order to the closest of its 40 massive and highly efficient distribution centers that has same day service available. From here a robot find your item and places it in a place where a human can package it and ship it to you just in time before the day is over. This is pretty crazy, right? Wait till read this next corporation’s new strategy!

debay   EBay, a dominant online seller has a brand-new beta service that brings same day delivery to an even new level. It currently operates in beta form in New York, San Francisco, and San Jose. This service involves personal shoppers, or “valets, that EBay will send to pick up a good you have just ordered. They will literally drive to the outlet from which you ordered it from through EBay, and deliver it to your doorstep that same day, sometimes even within only few hours! If this doesn’t impress you then this will. EBay now even offers an iOS app that you can use to buy, and track your item for same day delivery. This app tracks your “valets” progress in real time so you know exactly where he/she is, what step of the delivery they are on, and how far away they are from your home. This tracking app will even give you a picture of what the “valet” looks like so you can recognize them when they arrive. Once they have arrived, all you have to do is simply swipe your credit card, or pay with PayPal. The best part about this service is that it costs only $5, yes that’s it!

With this extremely gratifying service from these corporations how do you think it tests the limits of supply chain management and inventory management? Could this be the future for online shopping or delivery? Do you think implementing the service that EBay has in many other corporations could add a lot of jobs to the economy?

 

Sources:

http://www.wired.com/insights/2013/05/once-refined-same-day-delivery-will-be-commonplace/

 

http://blog.apptricity.com/bid/283436/How-Walmart-and-Others-Are-Achieving-Same-Day-Delivery

 

Beef Prices at an All-Time High a Good Thing?

In the recent months, commodity prices have soared to record highs, with the sharpest increase being in the price of beef. The reason for this increase is partially due to last summer’s drought, but it is much higher than most analysts predicted. This has begun to affect the profits of large restaurant chains such as Burger King, Wendys, and most importantly McDonalds.

1C7301038-130509_angus_hmed_1213p.blocks_desktop_smallIn early May, McDonalds announces that it would remove its Angus Third Pounders from their menu. The company said the removal of this burger was done to make room for other food options, but most experts agree that the profit margins are too low for beef items like these to remain profitable.

This has resulted in McDonalds and other restaurant chains to begin to retool their supply chain to put a heavier emphasis on chicken products, which is more profitable than beef. McDonalds has already begun to roll out new items such as the premium chicken wraps. This will definitely be more costly in the short run, but with rising prices, and more health-conscious consumers, it is a good long-term strategy.

With obesity at all time highs, and consumers becoming more health-conscious, this rise in beef prices could not come at a better time. Chicken is much healthier that beef, having significantly less calories and fat. With chicken prices being low, this could benefit both the restaurants and the consumer.

This situation can be compared to gas prices hitting an all time high in 2008.  Once prices hit the high, there was a sudden demand for more fuel-efficient vehicles, planes, trains, etc. They use less fuel, are much more efficient, and produce significantly less emissions that harm our environment. Similar to beef prices, consumers had no reason to switch to the better option until it became cost-effective.

In any industries of this size, change has to be gradual. Switching from beef to chicken is easy for consumers. On the contrary, in order to fulfill demand, restaurants like McDonalds have to completely re-tool their supply-chain. Farms need to change their facilities to accommodate more chickens, processing plants need to change all their machinery, and restaurants need to change how they cook and prepare the final product.

I personally believe that this will benefit both the profit-minded producer, along with the health-conscious consumer. The fast food world is changing, and these companies know that innovation is essential to adapt to the changing taste buds of consumers.

What is your eating preference at these fast food chains? Do you think this rise in commodity prices is a good thing? Have you become more health-conscious?

http://www.nbcnews.com/business/wheres-beef-mcdonalds-dropping-angus-burgers-us-menu-1C9864163

Wal-Mart Just Can’t Keep Products on the Shelves (In a Bad Way)

Wal-Mart Just Can’t Keep Products on the Shelves (In a Bad Way)

Wal-Mart has seemingly had a considerable amount of trouble keeping shelves in its stores adequately stocked since reducing the number of employees on staff at once in stores.  This is odd for a retail location since when products are not on shelves, there is not a large chance of them being purchased.  Especially disconcerting is that Wal-Mart has become the largest retailer in the world on the back of a supposed mastery of its supply chain.

Wal-Mart is now taking measures to ensure that the issue with product stocking is corrected.  The latest effort employed to do so is an external auditing process which entails a detailed process of checking each and every Wal-Mart location to make sure that products (when in stock) are on the shelves for consumption.

Wal-Mart refers to whether or not stores are adequately stocked via a metric known as on-shelf availability or OSA.  Due to the recent issues and the need to involve an external company to help stores ensure that they are stocked properly, shareholders are expected to vote at the next meeting as to whether or not Wal-Mart managers and executives should have their performance reviews and potential compensation tied to OSA.

When visiting a Wal-Mart location, check for neon green stickers next to the price tags on certain products; those are the ones that the auditors are going to be looking for.  Originally, the idea was to have the auditors go into the Wal-Mart stores and check on certain pre-determined items (unknown the store employees) and assign a grade based on how stocked those products were.  However, before the actual auditing process ended up taking place, it was determined that it would be beneficial to the employees at the stores to know the products that were being checked because those would most likely be highly driven items for the time of the year.  This entailed a rather tedious process for store managers as they had to allocate employees to the task of sticking green stickers next to products that needed to be stocked instead of actually just stocking them.

While the idea is good in theory, the actual outcome has been less than stellar since a good portion of the stores now have incredibly well-stocked green dot items with very poorly stocked products immediately next to them.  This should have been expected since the employees could focus purely on the products they would be evaluated on.

This situation is a very direct link to supply chain concept discussed in class.  In this case, the retail stores a sort of bottleneck.  After the products are produced and shipped to retail locations, they are not being put out fast enough to get to the customers.  Managers need to focus on properly allocating their limited employee resources to getting the task completed.

Do you think that this process will work?  How else could Wal-Mart improve its product stocking?

 

A Thousand Lives: The Hidden Cost of Clothes

Three weeks ago the Rana Plaza factory building in Bangladesh collapsed, killing 1,127 people. A majority of these were workers producing garments for sale in the United States and Europe. The factory manufactured apparel for brands including Benetton and Walmart among others. An investigation revealed that the building was deemed unsafe just days before the collapse, but factory supervisors ordered their employees to continue working in these hazardous conditions.

jp-bangladesh1-articleLargeThe obvious question is why a tragedy like this would occur, even after there had been a forewarning. The answer is because factories like Rana Plaza and others in Bangladesh are under immense pressure to produce a high volume of low-cost garments for their biggest buyers, Walmart, H&M, Inditex (which owns Zara), and Gap to name a few. These companies pride themselves on their ability to get apparel into stores only weeks after designing them. However, this incredible efficiency requires a tremendous amount of manual labor, and no where are labor costs cheaper than in Bangladesh. The massive global supply chains of a majority of apparel manufacturers flow through the South Asian country which trails only China in terms of garments exported. Unfortunately, most of the large Western companies are unaware of the conditions that exist in the factories where their products are being produced.

The latest tragedy has finally caught the attention of European and American companies. This past week H&M, the largest buyer of garments from Bangladeshi factories, agreed to a plan to improve fire and building safety in Bangladesh’s apparel factories. The five-year plan calls for independent safety inspections and for companies to make the findings public. Joining H&M were Inditex, the world’s biggest clothing retailer, and several other European apparel companies. However, PVH, the owner of brands such as Tommy Hilfiger and Calvin Klein, is the only American company that has signed the pact. Companies including Gap, Walmart and JC Penney have considered the plan, but have not yet signed on, mostly due to the cost and how legal issues would be resolved.

130430150217-made-in-bangladesh-620xaI believe this safety pact is a step in the right direction on the road to abolishing subpar working conditions around the world. Therefore, from a management perspective, I think that companies that are not signing the pact, like Walmart and JC Penney, are making a mistake. Not signing sends a negative message to consumers and investors, if the companies are unwilling to spend money to protect human lives customers will question the ethics of the company’s management. Ethics is an important facet of operations management. The managers at American apparel companies need to recognize these issues, like their European counterparts have, and address the dangerous working conditions that exist in their supply chain. I think in the long run the benefits of ensuring safe conditions for all in the supply chain will outweigh the cost.

What is your opinion on the decision of many American companies to not sign the safety pact?

Do you think it is the duty of American companies to ensure the safety of workers in foreign countries?

 

Sources

http://www.businessweek.com/articles/2013-05-13/h-and-m-pledges-to-make-bangladeshi-factories-safer 

http://www.ft.com/cms/s/0/79cedd4e-c000-11e2-b19c-00144feab7de.html#axzz2TmPslBBP

http://money.cnn.com/2013/05/13/news/companies/hm-bangladesh-safety/index.html

http://www.nytimes.com/2013/04/25/world/asia/bangladesh-building-collapse.html?pagewanted=1&_r=0&hp

http://www.bloomberg.com/news/2013-05-14/h-m-inditex-joining-bangladesh-pact-pressures-wal-mart-retail.html

For GE: old school is new school

 

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General Electric (Ticker “GE”) Fortune Magazine World’s Most Admired Companies at rank 11.  GE is the single surviving company from the 1896 Dow Jones Industrial Index and currently has  roughly 305,000 employees and over 140 billion dollars in revenue last year [GE 10-K for the year ending March 31, 2013].  I believe it is safe to say these guys know what they are doing.  They are in the business of designing and manufacturing appliances plus energy, health, aviation, and transportation equipment in addition to operating a financial services company.

Due to GE’s aggressive and hard pressed past, there are very few companies with the same or even similar brand recognition, especially as they have had such a long standing track record.

Though a mammoth company, GE too had troubles fighting down turns in 2008.  GE’s financial services wing, GE Capital, found itself holding just about half of GE’s profits.  GE Capital was having difficulties and thus GE had to cut its dividend which was a huge blow to its image.  All of this finance/business aspect of the company then affected how GE would then change its ways operationally.  GE realized it needed to simplify, and was most definitely a task involving and most reliant on its operations management team.

Most interesting for me was the refocus on a portfolio of the company to refocus on its traditional core industries.  That is, they are now going to focus and dominate at what they are good at.  For example, in 2012 GE began to make water heaters which was its first new product in 50 years.  The site that it was built on was named Appliance Park, KY (notice any connection?) though this site had been used less and less due to favorable overseas factories which were much cheaper.  Interestingly, in 2009 GE shifted toward moving those overseas jobs back into the domestic light.  This process is just being finalized and in full swing.

The result?  A cheaper and much more rapid production thanks to an efficient domestic supply chain perfected by the company.

Another interesting note about this company’s changes: GE is spending money on investments in the “industrial internet” in order to take hold of ‘big data’ to make more efficient machines.

Things to think about:

-How do you think GE asses’ its ‘utilization’ and ‘efficiency’ for its production facilities now that there is a fully implemented shift into domestic production for this large company.

-We discussed in our course lecture the concept of ‘planning over a time horizon’.  How do you think GE will have to change the way it plans its capacity or the upper limit or ceiling on the load that an operating unit can handle?

-We have seen virtually all large companies using automation and focusing on capacity.  We just discussed this in the course lecture last week.  How do you think GE’s focus on investing in the “industrial internet” will change the efficiency of their production machines?  Do you think this will be a drastic change? Something they won’t see for a long period of time?

Link to this CNN Money Article: http://money.cnn.com/2013/05/06/leadership/general-electric-industry.pr.fortune/index.html

adidas Closes Communication Gap Between Supply Chain Workers & Factory Management

Recently, adidas Group has made changes in managing its supply chain that allows for better communication between factory management and supply chain workers. During 2012, adidas Group conducted a mobile phone communication pilot project at one of its major footwear suppliers in Indonesia. The project emphasizes the fact that many workers in Indonesia use mobile phones regularly and that this form of communication can improve relations between factory management and supply chain workers.

The use of mobile phones to communicate between factory management and supply chain workers allows workers to send an SMS text message anonymously to a hotline when there are issues in which they are concerned about. The factory Human Resources or compliance staff manages this hotline. Workers’ concerns can be investigated quickly and workers can easily communicate issues directly to factory management. This allows these issues to be detected and addressed early. Not only does this system allow workers to communicate their concerns to management anonymously, it also allows management to have a better understanding of the supply chain workers, which in turn helps them better manage the supply chain. This system is also useful in empowering employees because they have direct contact with factory management. Supply chain workers have a chance to voice their concerns regarding their working environment and their concerns will be heard directly by management.

During the beginning of this project, workers began to communicate matters related to Human Resources, like staff reductions, working hours, and insurance. Some workers went the extra step and asked questions, as well as made suggestions to management. The pilot thus far has shown positive results from both the workers and factory management. In order to gain worker feedback, surveys were administered, and a majority of the respondents enjoyed the new system and saw it as a valuable communication channel with factory management. The success of this project pilot in Indonesia has led adidas Group to implement the project to four other Indonesian factories and one Vietnam factory. adidas Group intends to further extend this service to other adidas Group suppliers in future years. They feel that this is an effective form of communication and that it closes the communication gap that can exist between workers and factory management.

adidas Group Board member Glenn Bennett, who is responsible for Global Operations, explained that, “Protecting the interests of global workers involved in manufacturing our products is an on-going priority for the adidas Group as we constantly strive to improve workers’ conditions in our suppliers’ factories.”

With mobile phone usage on the rise around the globe, how could this form of communication change supply chain management? Are there any negative effects that could result from this form of mobile phone communication between management and workers?

 

Sources:

http://finance.yahoo.com/news/adidas-group-shows-leadership-supply-120504917.html

http://blog.adidas-group.com/2013/05/marking-a-new-milestone-in-the-management-of-our-supply-chain-–-the-sms-worker-hotline-project/

Image: http://upload.wikimedia.org/wikipedia/commons/thumb/2/20/Adidas_Logo.svg/200px-Adidas_Logo.svg.png

 

 

Does Apple Have A Supply Chain Flaw?

Apple, a company that holds power, and diligence in the business world, is considered to have a top line supply chain management system. The success of this powerhouse company is mainly due to the innovative thinking and approach when it comes to supply chain management. However, why is their stock falling like a sack of bricks, and how come sales have slowed down?

Apple has created a “closed ecosystem” where they control every aspect of the supply chain, and in turn this enables Apple to launch large product lines avoiding high costs. For example, when designing the green light that lets you know the camera is on in all their laptops, they designed special tools to create this “at the time impossible idea.” They concluded that they needed to create lazar beams to cut a perfect whole in to the aluminum, which saved money and shows how they have total control over their product supply. Another example of innovative thinking that complements Apple’s productivity in their supply chain is when they bought 50 million dollars worth of holiday airfreight space. This in turn limited competitors to get their product to retailers, and also gave a huge supply of Apple products in stores limiting consumer options. “They have a very unified strategy, and every part of their business is aligned around that strategy,” says Matthew Davis, a supply-chain analyst with Gartner. He has ranked Apple as the world’s best supply chain for the last four years.

Clearly they are doing something right, right? Well with the decline of the stock a lot of question has been raised. For example, if Tim Cook is such a supply chain specialist, then why does he only have one supplier for all it displays? Even worse, why is that sole supplier Samsung, one of Apple’s biggest competitors? Because of business related tension between the two, and lawsuits, Samsung is not supplying displays to Apple for the new iPad Mini which is a problem. Tim Cook is clearly forced with a rough decision, and now basically has to choose between two Suppliers, LGD, and AUO, who is a very new inexperienced supplier. AUO cannot meet the volume demands for Apple so that really only leaves one supplier, LGD.

Overall, if there is such a fantastic supply chain in the company, and Tim Cook, who was COO under Steve Jobs, is considered to be the specialist in that, why would he but sole supplying responsibility on Samsung, one of their biggest competitor? It seems to be a huge gamble, and almost idiotic. Do you think that this sole supplier Apple uses is their flaw? Do you think this is going to hurt them in the long run? Could Apple be giving away their “closed eco system” by doing this? Could it be the small size of the supplier market that is hurting Apple? How can they avoid this problem?

Sources:   http://www.businessweek.com/magazine/apples-supplychain-secret-hoard-lasers-11032011.html

http://www.forbes.com/sites/petercohan/2012/10/26/apple-cant-innovate-or-manage-supply-chain/

Apple Lacking Innovation? Or Master Plan…

In the recent months, Apple has been the hot topic of debate for almost every media source. This can be derived partially due to its 25% stock price decrease in the past year, but also because of an increase in competition from companies such as Samsung. Despite record profits, critics argue that Apple is “lacking innovation,” which is vital for its continued growth. Does apple not understand what consumer’s want/desire? Or could their upcoming innovations be so groundbreaking that it just takes longer to unveil?

Despite popular belief, Apple produces almost none of the components that are in its products. What makes Apple products both beautiful and efficient is their ability to integrate the hardware and the software so seamlessly. This is done through their remarkably efficient and streamlined supply chain.

In my opinion, Apple tends to innovate backwards. Apples innovation can be described like this; Apple solves the puzzle first, and then finds the pieces they need to make their vision a reality. Apple’s size, power, and money give them the ability to do this, but the actual timeline for a finished product may not be so clear and defined. This is why an efficient and communicative supply chain is so important to Apple.

Most analysts would agree that the biggest upcoming feature on the iPhone 5S is its fingerprint sensor. This is not a new concept, but the way Apple will use it will be remarkable. The mobile payment system is the way of the future, yet is has failed to take off. This is not due less to lack of technology, but more because of security concerns. By having someone’s phone password, one could gain access to every credit card they own. A fingerprint sensor would basically eliminate this problem, and would allow the mobile payment system to grow exponentially.

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Apple sold over 50 million iPhone 5s, so a small glitch in hardware or software can be detrimental. First, Apple needs to make sure the hardware is functioning properly. Last week Reuters reported this, “A supply chain source in Taiwan said Apple was trying to find a coating material that did not interfere with the fingerprint sensor, and this may be causing a delay.” Second, Apple needs to make sure its manufacturers can produce the product that keeps up with demand. Third, the software needs to be 100% accurate to prevent possible fraud. Last, Apple needs to beta test the product until they know it is absolutely perfect.

Personally, I believe that Apple’s master plan is much smarter and more innovative then any analyst can predict. Critics thought the first iPhone would fail because it didn’t have a keyboard. They thought the iPad was just a “big iPhone,” and no one would buy it. Currently, these are two of the most successful and profitable consumer devices on the market. Apple’s master plan is bigger than we think. Supply chain issues may slow its product cycle down now, but I think it will only be a minor speed bump in Apple’s continued dominance.

What is your current view on Apple? Are you continuing to buy Apple products? Will a fingerprint sensor on the iPhone 5S be the deciding factor on whether you will upgrade or not?

http://www.forbes.com/sites/anthonykosner/2013/04/28/is-the-iphone-5s-fingerprint-reader-worth-the-wait/

https://www.google.com/finance?cid=22144

Can We Afford to Raise Wages to 29 Cents per Hour!?

After several major accidents in textile factories in Bangladesh over the past couple months, in which hundreds of workers died, Walmart sent a warning of its new “Zero Tolerance” policy to suppliers. At least two of these factories had what Walmart called “unauthorized” contracts with its suppliers. Walmart has reacted by informing its suppliers that it will no longer tolerate unsafe working conditions or unethical practices in the factories that make goods destined for Walmart stores. In a letter sent to suppliers outlining the company’s new policy, Walmart states that suppliers who fail to meet Walmart’s new guidelines could risk being permanently barred from doing business with the retailing giant. Is this move by Walmart just PR damage control or do you think the company will truly follow through on this new policy? If the company does follow through, is this new stance based purely on calculated analysis that will save money in the long run, or does Walmart truly care about human rights?

On April 24th a Bangladeshi garment factory complex collapsed killing 362 people, although the building housed nearly 6,000 employees and many are still unaccounted for (Link #1). This disaster is at least the third of its kind to occur in the south-Asian nation since 112 workers died in a factory fire in November 2012.

With wages and inflation increasing in China, Bangladesh has seen many garment manufactures move to the impoverished nation. China’s average hourly wage is now $1.34, while Bangladeshi wages are on average between 18 and 26 cents per hour, the lowest in the world. Spurred by cheap labor, the garment manufacturing industry in Bangladesh has grown to about $19 billion as of 2013 (Link #2). This quick growth, coupled with a low-cost focus, has led to unsafe conditions in which many factories have been converted from residential buildings, thus not meeting fire safety or maximum occupancy regulations. According to the executive director of the Bangladesh Center for Worker Solidarity, about half of the factories in Bangladesh do not meet legally required work safety standards, standards that are much lower than other emerging nations to begin with.

To combat this problem, Walmart has released a document spelling out its “zero tolerance policy” pertaining to working and safety conditions in factories suppliers subcontract with (Link #3). Within this document, Walmart states it “would like to improve the safety of [its] global supply chains”, and that it “is committed to value chains that empower people who work in them.” To oversee this goal, all factories in Bangladesh are to be audited by Walmart to ensure they are abiding by acceptable safety standard regulations and “Ethical Sourcing” requirements. Factories that fail to meet these requirements will be added to a “red card” list on Walmart’s corporate website, which will bar them from being included in the company’s massive supply chain. Further, according to the “Zero Tolerance” document, Walmart has been meeting with government officials and other companies who outsource manufacturing to Bangladesh in order to create a united front against subpar labor standards.

If the “Zero Tolerance” measures don’t work in Bangladesh, Walmart’s suppliers may have to move contracts to countries like Cambodia or Vietnam where average hourly wages are 29 cents and 55 cents, respectively. This move will undoubtedly raise costs associated with Walmart’s supply chain, as will implementing the auditing process of Bangladeshi factories.

As a reader of this blog, what do you think Walmart’s motives are for implementing these strategies? From a profit and loss standpoint, do you think this will help or hurt Walmart’s shareholders?