Outsourcing is a double-edged sword, offering many pros and cons. One of the most controversial issues is the supposed “cost savings” of using an external supplier. Some of these suppliers are able to produce your products at a lower cost by cutting corners. This practice can often create many risks for your brand and its reputation. The question to ask yourself is whether outsourcing is worth the risk?
Here are some common issues to consider about your supplier’s best practices:
Working Conditions: Because of cultural and legal differences in various countries, factories might not follow the same policies considered standard in the US and Canada. These include the International Labor Organization’s conventions and the Universal Declaration of Human Rights.
Environment Concerns: Immense industrial growth offshore over the past 35 years has made for both the creation of manufacturing and pollution-producing giants. Because of the focus on rapid economic expansion, many companies overlook environmental concerns. Scrutinizing environmental compliance in other countries can be tricky, but very important in our day and age.
Material and Safety Compromises: Cases of negligence where dangerous materials are being substituted in products coming from China are not as rare as you would think. Just a couple of weeks ago Ivanka Trump’s line of scarves were recalled for violating federal flammability standards. The 100% rayon products, which posed a severe burn risk, were “made in China”.
A key area of corporate social responsibility is the extent to which companies manage their supply chains responsibly. Companies have started to realize this by controlling the risk areas with audits and policies that their suppliers must adhere to, thus breaking through the cultural and legal boundaries previously set.
With this change, companies are able to do the following:
- Reduce operational risks
- Protect brand reputation
- Create a competitive advantage
Promotion Resource Group is committed to conducting its business affairs in a socially responsible and ethical manner. We maintain just and decent working conditions throughout our business, striving to adhere to a strict Code of Business Conduct, and we require our suppliers to do so as well.