Situational Values Could Be Biggest Supply Chain Threat

Based on the large amount of traffic at my last post "How Many Fake Parts Are In Your Supply Chain?" it's clear that many of you are thinking about the integrity of your supplier networks.

But, remember this: That integrity isn't dependent solely on genuine electronics and the other components that we typically think of as "parts." The integrity of your supply chain also relies on that ambiguous, amorphous factor known as the "human element."

And in fact, it seems that these days the human element matters more than ever before.

Thomas Friedman eloquently discusses this very issue in his Op-Ed piece, "A Question From Lydia," in yesterday's New York Times.

As Friedman sees it, our increasingly integrated world has made us and by extension, our supply chains more ethically interdependent. He writes:

Indeed, in a world where our demand for Chinese-made sneakers produces pollution that melts South America's glaciers, in a world where Greek tax-evasion can weaken the euro, threaten the stability of Spanish banks and tank the Dow, our values and ethical systems eventually have to be harmonized as much as our markets. To put it differently, as it becomes harder to shield yourself from the other guy's irresponsibility, both he and you had better become more responsible.

But, as Friedman also points out, beefed-up responsibility certainly hasn't been the trend of late. Goldman Sachs and BP are two rather spectacular examples. And on a smaller but still significant scale, those of us in supply chain management are hearing more and more frequently stories about phony supplier audits, bribes and corruption.

What's going on? Friedman says we're becoming increasingly vulnerable to what he describes as "situational values": I do what the situation allows.

And unfortunately, that means phony microchips and tainted pharmaceutical ingredients are only the tip of the iceberg.

What can supply chain managers do? At times, the challenge can seem overwhelming. Regulations help. But, a broad-based solution will require a shift in thinking, a new appreciation for our interdependence and shared responsibility. Again, from Friedman:

Of course, to counter this epidemic of situational thinking, we need more and better regulations, but we also need more people behaving better. Regulations only tell you what you can or can't do in certain situations. Sustainable values inspire you to do what you should do in every situation That is a leadership and educational challenge. Regulations are imposed values are inspired, celebrated and championed. They have to come from moms and dads, teachers and preachers, presidents and thought leaders.

In short, we're each, in our own way, involved in the solution. And, like it or not, the integrity of your supply chain hangs in the balance.