Improving Environmental Performance in Your Chinese Supply Chain Harvard Case Solution & Analysis

Transnational corporations are under increasing pressure to ensure that their contractors and subcontractors in China environmental standards in its operations. However, traditional approaches to environmental, health and safety compliance, such as a list of tests, proved problematic. The authors conducted a study over one-and-a-half-year period, with leading multinational customers (mostly in the apparel and footwear industry), as well as with non-governmental organizations and industry groups in China. Based on their research, the authors report that, rather than just monitoring Chinese suppliers'compliance with local environmental, health and safety (EHS) standards, leading companies give providers the tools and incentives alone improve environmental performance. They help the suppliers of energy, water and materials more efficiently and reach deeper into their supply chain, where the most damage to the environment occurs. At the same time, they overcome their traditional reluctance as competitors cooperate in monitoring and fixing problems on common suppliers.

Authors describe innovative approaches, companies such as Nike accept. In general, authors'recommendations include: working closely with suppliers and providing incentives for the identification, detection and solving problems, creating relationships with nongovernmental organizations and industry groups, as well as finding ways to learn from suppliers'best practices and facilitate learning among suppliers .
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by Erica Plambeck, Hau Lee, Pamela Yatsko Source: MIT Sloan Management Review 11 pages. Publication Date: January 1, 2012. Prod. #: SMR408-PDF-ENG

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