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

Multinational corporations are under growing pressure to ensure that their contractors and subcontractors in China meet environmental standards within their operations. Yet traditional approaches to ensuring health environmental and safety compliance, for example checklist audits, have proved difficult. The authors conducted research over a one-and-a-half-year span with leading multinational buyers (mainly in the apparel and footwear sectors) as well as with NGOs and business groups active in China. Based on their research, the authors report that rather than simply tracking Chinese suppliers'compliance with local environmental, health and safety (EHS) standards, top firms are giving suppliers tools and incentives to independently improve environmental performance. They are helping providers use energy, water and stuff more efficiently and reaching deeper into their supply chains to where the biggest environmental damage happens. At the exact same time, they are overcoming their traditional reluctance as challengers to work in fixing and monitoring issues at common suppliers.

The authors describe innovative approaches that companies such as Nike are taking. More generally, the writers' recommendations include providing incentives for revealing identifying and addressing problems; establishing collaborative relationships with NGOs and business groups and working closely with providers; and finding methods to learn from suppliers'best practices and to facilitate learning among suppliers.

PUBLICATION DATE: January 01, 2012 PRODUCT #: SMR408-HCB-ENG

This is just an excerpt. This case is about TECHNOLOGY & OPERATIONS

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