Category Archives: Miscellaneous

JLP Responsible Sourcing Part VI: Freedom of Association and Employee Representation

In our last post, we focussed on discipline, and how you prevent discipline-related issues,

corresponding to section E of the report.

In today’s post, we cover section F of The John Lewis Partnership‘s “Responsible Sourcing Supplier Workbook” which covers freedom of association and employee representation.

In addition to a worker’s right to socialize with whomever they choose, freedom of association refers to a worker’s right to form and join a workers’ association, council, group, committee, and / or union of their choosing. A worker must have the right to belong to a group that provides them with an effective process to raise their concerns with management and which works to ensure continual good communication between workers and management.

Freedom of association and employee representation is important because it contributes to an employee’s sense of well being. It’s a proven fact that content employees who enjoy going to work everyday are much more productive than those who hate their jobs and fear going to work because they are degraded or abused. Consider the statistic in our last post that found that workplace bullying contributes to an estimated loss of 18 million working days every year in the UK alone. Imagine the global productivity loss from poor disciplinary management alone!

Associations, trade unions, and committees, when formed under good intentions and properly led, can help significantly by:

  • improving two-way communication between employees and managers
  • negotiating improvements to working conditions and compensation
  • acting as a positive force for change

It is true that there are often real and perceived barriers to freedom of association and employee representation, which include:

  • many companies find the concept of a union or worker’s group threatening
  • workers are often scared of putting themselves forward for election
  • in some countries, the formation of a union is illegal
  • sometimes the worker who is elected does not have the skills or training to effectively run the organization

But it is also true that these barriers can be easily overcome with education and a positive approach. The report offers some suggestions:

  • suggestion boxes as a mechanism for anonymous reporting of issues
  • committees to act as an interface between employees and management
  • informal committees to handle specific issues

The report also offers a checklist that you can follow to make sure that your employees have sufficient freedom of association and employee representation:

  • workers are able to collectively bargain regarding key aspects of employment
  • workers have a union, association, or committee they can use for reporting issues and collectively bargaining
  • management meets regularly with the union, association, or committee that handles employee representation
  • management actively responds to concerns and communicates outcomes
  • members or representatives of unions, associations, or committee are not treated differently in any way
  • employee representatives of such organizations can carry out their duties within working hours without penalty

Anyone who knows me well might wonder why I do not have a problem with this section of the JLP responsible sourcing workbook since they will believe I am adamantly against unions, as I have spoken quite negatively about them many times in the past. However, that view is specific to the formation of unions in IT and other knowledge industries in developed countries where adequate government protection exists to protect basic employee rights and freedoms. With regards to agricultural, manufacturing, and other hard-labor based industries in developing countries where there are little or no laws to protect the rights and freedoms of an employee, my stance is different. In that context, I have no problems with unions.

Furthermore, I believe unions could have a positive impact on many developing economies, just as they did in our own during the industrial revolution which took place a little more than a hundred years ago. Back then, we didn’t have all of the laws we do today that protect basic worker rights and freedoms. Furthermore, in a labor-based industry, the productivity is not going to vary much between your worst employee and best employee, and, thus, the notion of an open-market, while quite beneficial to a knowledge-based job where your top employee is order of magnitudes more productive than your average employee, does not have the same effect. And even if it had a slight impact on an organization’s ability to attract the best and brightest, considering the atrocious working conditions in some countries, this would be more than compensated by the improved working conditions that would result.

In our next post, we’ll tackle the sixth major issue addressed by the workbook, that of working hours. (You can access all of the posts in the series (to-date) by selecting the JLP category at any time.)

Cadbury gives Oompa Loompas a Bad Name

Last month I reported that Cadbury, who was making grandiose efforts to become “synonymous with the color purple” (Metro UK) was down on its luck and was announcing massive job cuts to try and right the ship. But before you go feeling sorry for the sugary giant (which is the world’s largest confectionary company with revenues of about £7.4b in 2006) and it’s self-reported need for a “£650m four-year cost reduction plan” (Silicon.com), which it is partially blaming on its enterprise rollout of SAP (which caused too many chocolate bars to be produced and forced it to take a £12m hit on profits), it seems that it decided to introduce a new testing system for salmonella last year that allowed “safe” levels of salmonella in its products.

Well, when it comes to salmonella, there are no safe levels when consumables are involved, and that’s why the official guidelines say that there is to be no salmonella in ready-to-eat products. Furthermore, they did this knowing perfectly well that outbreaks of salmonella had been associated with very low levels in chocolate. See, salmonella is a bacteria … a gram-negative enterobacteria to be precise … and, like all bacteria, they have this funny habit of multiplying like mad under the right environmental conditions (which, oddly enough, are provided by the human body). And what did they get for it? A slap on the wrist for potentially exposing thousands and thousands of people to a bacteria that is known to kill at least 600 people a year (as per the CDC) and infect over 40,000.

Salmonella
and you’re to blame
Cadbury, you give oompa loompas
a bad name

The Cost of Capitalism

Capitalism, the foundation for a free market, has its cost. It’s called inflation. And when that cost is accompanied by rising raw materials prices, especially in metals, that cost multiplies. We’ve all heard the arguments that we should at least stop using pennies in North America, since the average penny cost 1.25 cents to make in the US in 2006, and maybe even nickels, since they cost 5.73 cents to make in the US in 2006, but it seems that our problems in North America are nothing compared to the problems they have in India.

It seems that their rupee, worth about 2.5 cents in North America, is actually worth about 15 cents to your average resident if they melt it down and make razor blades. It’s as illegal there as it is here, but when your currency is worth at least 600% more as scrap metal, and at least 25% of your population is below the poverty line, it becomes a bigger problem than copper salvage in China. The coin shortage is so bad in some places that some tea gardens have had to resort to using card-board coin slips internally.

It’s a good thing the smugglers and grocers aren’t thinking globally, because razor blades these days cost a heck of a lot more than 2.5 cents! The going price is somewhere in the neighborhood of 2.22 cents for a Gillette Mach 3, or roughly 74 cents here in Canada (as evidenced by a recent Walmart receipt, which is the lowest cost seller in the area). If they ever figure this out, I doubt there’ll be a single rupee left in India!

The Arena Solution

The effectiveness of your Product Lifecycle Management (PLM) solution and its ability to manage the information associated with the entire lifecycle of a product from conception, through design and manufacture, to service and disposal, can be the difference between costly inefficiency and profitable efficiency. However, the complexity and cost associated with many traditional PLM solutions often puts these solutions out of reach of most small and mid-size companies. That’s why the on-demand PLM solution from Arena deserves due consideration from any product manufacturer looking to increase their efficiency and productivity and why sourcing and procurement professionals should be familiar with it, and its benefits, since the greatest cost reductions result when sourcing is involved in product development from day one.

Arena, founded in 2000 by ex-manufacturing executives who needed an easy to use, affordable, and quick-to-implement PLM solution that could take advantage of the internet as a delivery mechanism to allow for collaboration both within and beyond their four walls, is different from traditional PLM providers in that it is easy to implement, easier to use, and accessible to all of your partners, to whatever extent you want it to be.

Whereas a typical behind-the-firewall PLM solution is often challenging even for trained power-users, as expensive as SAP (comparative speaking), and significantly complex and time-consuming to implement (with implementation and configuration cycles of six months to two years not uncommon – and sometimes only for basic functionality), small to mid-size users of Arena can often be up and running in a day, with the most complex implementation maxing out at about a month.

Arena also has all the traditional benefits of an on-demand solution – including no large up front cash outlay, economies of scale, free upgrades, rapid responsiveness, and collaboration in addition to an ultra-configurable fine-grained security model, cirriculum-based on-demand training, and multiple role support to allow you to buy just the capabilities you need for each user. This makes the application very secure as you can control, right down to the domain and IP address, who has access to what and when the information expires and ultra-deletes, very useable as a user can access just the training resources she needs when she needs them, and makes the application very affordable as a company only has to pay for full access for the users that need it.

Furthermore, Arena is a very stable company with over 300 customers from garage shop operations all the way up to entire divisions of companies like Xerox. Many of these companies use the application across departments and with suppliers and partners distributed all over the globe. And when you factor in that they do a quarterly analysis on application usage on a customer-by-customer basis to determine not only what customers are using what features but what customers are not using the capabilities they paid for, so that they can contact those customers and find out what they need to improve either in the application, the training materials, or the customer support, you know that they’re not going anywhere.

Arena is particularly suited to the mid-market that they’re focussed on. Their on-demand model allows them to offer a flexible pricing model that can support three guys in a garage all the way up to large mid-market companies and their focus on the Product Information Management (PIM) aspect of PLM allows them to offer a PLM for mere mortals solution that anyone can (learn to) use. So if your mid-market company is looking for a PLM solution, make sure that the candidate solutions are those that can also be used by sourcing professionals like you and consider pushing to have Arena added to that list. After all, when it comes to on-demand, there just aren’t that many PLM providers, and fewer still that built their solution on-demand from the ground up. In the former category, I believe there’s PTC’s Windchill solution, which is resold by IBM, and Oracle‘s hosted Agile solution (which isn’t really true SaaS), but in the latter category, and I’ll admit I’m not an expert in the PLM space, I don’t know of any other on-demand PLM solutions that were built to be on-demand SaaS from the ground up.

Global Trade Metrics Benchmarking

Have you ever wondered …?

  • How effective are your global trade operations?
  • Is there a way to effectively measure its performance?
  • How much does it contribute to the company’s bottom line?
  • What are your competitors doing?
  • Are others using global trade to a competitive advantage?

If so, then Global Data Mining (acquired by CUSTOMS Info which was acquired by Descartes) would like you to join them for a webinar on Thursday, July 26, 2007 11:00 AM – 12:00 PM EDT to discuss one of the last frontiers where upgrading and optimizing business systems can create very significant financial and operational gains, giving corporations an additional strategy to create competitive advantage.