When it comes to supply chains, ignorance is risk
Interesting report in Bloomberg Businessweek recently on industry’s response, or lack of it, to the new US regulations on conflict minerals – the standard response sees to be a shrug and “I dunno…” Or as Charles Harris, an audit partner at PwC, is quoted as saying:
“It took some companies a little bit of time just to figure out what their supply chain was and where they needed to start to gain the information.” [my emphasis]
It seems quite extraordinary that in this day and age that so many major businesses are taking this lackadaisical attitude to the extent where they don’t understand their own supply chain. The rules provide for a lack of knowledge, but you would have thought that the risk of this blowing up in their face would spur action not just to avoid a media storm, but also to ensure security of supply.
Businessweek also quotes Keir Gumbs, a partner at Covington & Burling LLP who advises companies on their disclosures, as saying:
“If suppliers are really unhelpful and just fail to respond in any meaningful way or with bad information, companies are just kind of stuck with that.”
Or they could go and find some better suppliers.