If ever evidence was needed that Corporate Social Responsibility is getting ‘sexy’, then it has been provided by one of the world’s biggest sportswear firms, Nike.

Six months ago Nike kicked a Pakistan-based football supplier into touch for flouting its code of conduct - now the company are back sourcing footballs from the country after being satisfied that Silver Star, a company from the northern tip of Pakistan’s Punjab province, have met Nike’s strict ethical specifications.

Under the new agreement, all Silver Star workers must be registered full time employees and all must receive social benefits of some description. Furthermore, all workers will have the right to unionise and collectively bargain.

"We hope this is the beginning of broader, positive systemic change for workers, and that the example Silver Star sets will help Pakistan’s soccer ball industry create a new model of responsible, globally competitive manufacturing" said Mark Parker, Nike's President and CEO.

Nike expects to place its first orders later this summer and, if successful, the balls used at many Premiership matches next season will be ethically produced and come straight from the Sialkot plant.

Not content to stop there, the Oregon-based company’s annual corporate responsibility report states that they are making strenuous efforts to cut down the amount of overtime carried out in their 700 contract factories over the next four years.

The company, who employ an estimated 800,000 workers worldwide, had received criticism in 2005 after claims emerged of poor working conditions at some of their plants.

Something Nike’s chief executive Mark Parker is keen to tackle: "We see corporate responsibility as a catalyst for growth and innovation," he said.

"It is an integral part of how we can use the power of our brand and the scale of our business to create meaningful change."

Nike has also pledged to become “climate neutral” by 2011 after setting itself new targets for reducing waste.

All of which, of course, comes in a week when US President George Bush, finally made some positive noises over greenhouse gas emissions. Maybe it’s just coincidence, or maybe Nike’s most famous devotee, Michael Jordan, had a word in his ear.

It’s increasingly difficult to have a conversation with anyone involved in procurement without the word ‘global’ slipping into the dialogue at regular intervals, which is why a recent piece of research caught my eye.

According to BDP International’s Centrix consulting unit and St Joseph’s University in Philadelphia, nearly half (48%) of supply chain executives consider their supply chains to be global, despite the fact that the operating decisions that dictate the strategy of these supply chains appear to be anything but.

The research found that 60% of the executives questioned in the study said that supply chain decisions in their companies were regional or local in scope. Just 35% of respondents said that their supply chains were managed globally.

The findings led Yone Dewberry, Centrix Managing Director, to conclude that the majority of multinational companies are operating supply chains that are not “global” but are in fact “multi-domestic.”

“The reasons for this vary, but the unrelenting pressure to achieve per-unit cost reductions, in tandem with the emergence of true global data visibility, must hasten supply chain integration to accommodate the exigencies of international trade,” Dewberry said.

The research found that the most pressing issue facing those companies who do operate in a truly global marketplace to be on time delivery, with 64% of those questioned (87% European and 55% North American), citing this as their biggest concern.

Conversely, in a study that unearthed a diverse range of findings, 43% of those involved in the study reported that the implementation of a global supply chain strategy had led to shorter lead times, courtesy of increased investment in supply chain technology and management systems.

For many companies though, it seems that the quest to go global has not extended as far as they imagined.

The fair trade label found on products in many supermarkets is enough to reassure most consumers that the goods they are buying have been manufactured and produced to ethical guidelines.

Now, however, a recent investigation has posed the inevitable question – when is Fairtrade, not Fairtrade? A study by the BBC focused on working conditions at Pratts Bananas in Luton , a ‘Fairtrade’ company that supplies Britain ’s biggest-selling fruit to a number of the country’s leading supermarkets, including Waitrose and Tesco.

Under Fairtrade, each banana is quality-tested at least twice, once at the farm and once at the ripening depot. Every supplier also signs an agreement to pay fair prices to growers in the third world. So far, so good.

But thanks to covert recordings and on-the-record interviews with staff, this Fairtrade agreement does not appear to stretch to the 300-or-so employees who spend up to 15 hours a day for six, sometimes seven days a week, carrying 20 kilo boxes of bananas over several dozen times during the course of a shift.

One women, a Polish worker who is currently taking the company to an employment tribunal, said she believed that the workers in the factory were treated like animals, at times being forced to wait up to ten hours for a break – the current European Working Time Directive states that each employee is entitled to a 20 minute break if they are working over six hours a day.

So where does Fairtrade end? The moment the suppliers receive a fair sum for their crop and the shipment arrives? Or when the product finally finds its way into your shopping trolley?

The current case appears to be an isolated one, but the question is still valid.

The popping of Champagne corks could be heard all over South East London on Wednesday night as the winners from the inaugural European Leaders in Procurement Awards celebrated long into the night. And who can blame them.

A few years ago such an event would not have even been conceived as a possibility, and now, at one of London’s most notable venues, excellence in procurement was finally getting the recognition it not necessarily craves, but certainly deserves.

Over 200 people attended and walking around ear-wigging, as I tend to do on occasions such as this, there was an underlying air of goodwill and excitement. Even the Liverpool fans – who doubtless had their minds on events many miles away – seemed determined to enjoy themselves (although they would have needed to stay away from a radio, a television, or a Chelsea fan to really appreciate the evening).

Such was the continental flavour of the event that a German magician was touring the tables wowing onlookers with routine of beguiling tricks – and I should know, one minute I was propping up the bar and the next I was tapping a metal bowl and producing foam balls that were seemingly multiplying before my very eyes. Don’t ask me how I did it - I’ll tell you next year.

The awards, or the procurement Oscars as I coined them back in January, may have lacked the red carpet, and the over-the-top acceptance speeches, but the appreciation of the talent on show was as genuine in London Bridge as it would have been in Hollywood . And like their cinematic equivalents, the event attracted a truly international audience. Mingling in the bar before food was served I was fortunate enough to company representatives from across the world, and, with it being Vinopolis, the conversation, like the wine was flowing.

Grasping their awards the winners were understandably delighted. As I headed for the bar, Lucy Haighway, a winner in the Future Award Category, informed me she was off to buy some champagne, whilst others seemed to content to enjoy the sweet smell of success with just a Heineken Export for company. All of them made it clear that they are already looking forward to next year’s awards.

From a personal viewpoint the one disappointment of the evening was my inability to track down the winner of the evening’s lesser known, but equally important awards. Doug Brown picked up the ELP Wine Tasting Award, but after the ceremony was nowhere to be seen. Maybe the success had gone to his head.

 

I recently came across an article in Vanity Fair on Ronald Reagan’s long forgotten diary. (A must read for anyone interested in the inner-workings of U.S. politics or anyone who was a fan of the 1980s. I’m both.) One entry recounts Reagan’s first meeting with U.K.’s then-Prime Minister Margaret Thatcher (shorthand is President Reagan’s):

“[Thatcher] was as firm as ever re-the Soviets and for reduction of govt. Expressed regret that she tried to reduce govt. spending a step at a time & was defeated in each attempt. Said she should have done it our way–an entire package–all or nothing.”

The comment was reminiscent of a meeting I had recently with a supply chain technology director and newly appointed CPO at a U.K. public sector organization. In the throes of a major supply management improvement initiative, the two execs debated whether it was better to start with a few trial online sourcing projects or to push forward with their broader transformation plan.

The supply management overhaul was already greenlighted (mandated, in fact) by the organization’s top execs. Funds for supporting supply management software were earmarked. So the debate over whether to toe the supply management improvement waters or to just jump in centered on the concern that the rank and file would resist efforts to improve or change operations.

“Many of our [supply management] team have been doing purchasing a certain way for decades,” argued the technology director. “They are uncomfortable with adopting new processes and systems. I am concerned about driving adoption.”

Now, I am the first to stand up and warn of the challenges of driving adoption and changing old habits. (And I’ve seen first hand how these challenges are magnified in the public sector.) I am also a fan of tempered roll outs when used as a proof-of-concept to secure executive support and budget for a broader project. (Evidence my applause for a newly minted Boston-based CPO who first ran four online sourcing projects, saving his firm millions, and then asked for funding for the e-sourcing solution.)

Yet, scaling back a supply management overhaul to satiate uncomfortable employees is akin to letting the inmates run the asylum. It is also the surest way to ensure that your supply management improvement initiative with fail miserably. The whole point of transformation is…well…changing and improving upon the old way of doing things. And change isn’t easy. It requires retraining existing staff, other internal stakeholders, and suppliers. It may even require upskilling (i.e., a euphemism for churning) the workforce.

The episode is emblematic of the biggest challenge facing supply management today: the talent crunch. The harsh reality is that supply management discipline is currently the victim of unfavorable demographics. Old-school purchasing folks that have been processing purchase requests for the past 30 years are ill equipped to utilize the more strategic approaches (and technologies) required to succeed in today’s global supply management environment. To make matters worse, as the above episode indicates, many purchasing personnel are unwilling to change.

Considering this stance, you won’t be surprised at how pleased I was when the newly arrived CPO looked across the table at the technology director and said bluntly, “I’ve always been one to jump right off the cliff [instead of doing a trial]. I’m certain it will be painful for a few months, but, after that, people will become familiar with the new process and systems. This will put us much further ahead in our goals. And reduce the opportunity for [employees] to sabotage our transformation because they feel it’s only a pilot.”

The discussion provides a cautionary tale for other supply management groups launching improvement initiatives. Making change happen requires a clear vision and full commitment. As Prime Minister Thatcher learned, tip-toeing into transformation arms the naysayers, giving them ample opportunity to stall or thwart your improvement plans.

It’s safe to say 2007 is fast becoming a year to forget for Germany ’s biggest telecoms company. Last week more than 10,000 of Deutsche Telekom's employees took to the streets of Bonn over the company’s controversial outsourcing plans. There are now fears the disruption could have a dramatic impact on the upcoming G8 summit in the Baltic Sea Resort of Heiligendamm.

Last week the company, who are dealing with their first major strike since they were privatised in 1996, reported a staggering 58% fall in three-month profits as more than half a million customers abandoned their fixed-line business to join cheaper rivals.

It’s results like this that recently forced directors at the company to announce plans to outsource 50,000 jobs to a separate and newly created, T-Service unit. At the same time they proposed a four-hour increase in working hours, from 34 to 38 hours per week.

Unsurprisingly, this hasn’t gone down well with service union Verdi whose members are bitterly opposed to the action. Although Deutsche Telekom claim the move is essential if the company is to maintain their position in a home market that is becoming increasingly swamped with cheaper competition, neither side seems prepared to budge on the issue.

There has been no word from the company so far on the effect of the walkout, which has extended to a second week, although speaking before the start of the industrial action a Deutsche Telekom spokesman said: “We have had to deal with short walkouts in the past couple of weeks, so we know what to expect.”

Of more immediate concern are the company’s preparations for the G8 Summit later this month. Telecoms technicians on both the site and nearby media centre, downed tools last week, leaving the company with little option but to hire in workers to replace those who are on strike.

How effective this stopgap solution will prove to be remains to be seen, but with both Deutsche Telekom and Verdi digging their heels in, a communications blackout at a summit involving some of the continent’s most powerful figures is unlikely to do much for a company whose year is rapidly going from bad to worse.

As concerns over global warming increase, particularly after another round of record temperatures across Europe in April, attention is turning ever more swiftly to the fuels of the future.

But if Government’s across the world were hoping the production and use of biofuels was the silver bullet needed to avert an environmental catastrophe, a new report by the Co-op Insurance Society suggests they could be left sorely disappointed.

The EU recently stated by the year 2020, 10 percent of all fuel in cars should come from biofuels, but the Co-op report claims the rush to find a replacement for oil could see a dramatic rise in both food prices and deforestation.

Hardly what the European Union wanted to hear; particularly as it comes just days after another report by the UN claiming biofuels were more effective when used, not in transport, but for heat and power.

The use of Biofuels, which substantially reduces greenhouse gas emissions, has long been hailed as a viable and a more environmentally friendly alternative to oil, but with the Co-op report claiming that a staggering nine percent of the world’s agricultural land would be needed to replace just 10 percent of the world’s transport fuel, it hardly seems like a sustainable option.

Sam Lacey, responsible shareholding analyst at the CIS and author of Biofuels: Risks and Opportunities of an Emerging Industry, said: “ Biofuels are not a panacea for climate change but can play their part if governments and companies start thoroughly managing the social and environmental impacts.

"The current growth of the industry is happening without paying attention to the long-term impacts. It must be pushed in a more sustainable direction and complemented by fuel-efficiency measures and reducing our use of fossil fuels."

Argentina is just one of a number of countries who have jumped on the biofuels bandwagon in recent months. Last week they announced it was introducing tax incentives on new initiatives and said they wanted to see five percent of the nation’s fuel supply switched to biofuels, such as biodiesel or ethanol, within the next three years.

Not surprisingly in a country which has suffered double-digit inflation for the past two years, the announcement was greeted with scepticism and scorn by ordinary Argentines who fear diverting farmland for biofuels will send food prices soaring once again.

Professor Dieter Helm, a leading advisor to the British Government on environmental issues, told the BBC: "People are felling rainforests to plant crops to grow energy fuels, biofuels.

"Think of the energy involved in felling those rainforests. Think about the damage to the climate being done by the loss of those trees. Think about the ploughing and the cultivation of fields.

"Think about the transport of those fuels, and you start to realise the carbon imprints are about much more than simply what happens to grow in a particular field at a particular point in time."

Like the world’s great highways, it seems the search for an alternative fuel source will run and run.

Companies can avoid damages if they ensure their suppliers act according to Corporate Responsibility principles. Child labour scandals in India, soccer ball production under inhumane conditions in Pakistan, outrage about sub-standard wages in Hamburg luxury hotels – companies often find themselves placed in a negative light because their supplier do not act according to Corporate Responsibility (CR) precepts. These problems occur with increasing frequency in this age of complex supply chains. Corresponding media coverage damages a company’s image and brand, as well as its stock price and thereby the company’s value. It only takes a few days to destroy that which has taken years to build up.

Today, no company can afford to entirely entrust the issue of Corporate Responsibility to its suppliers. Companies that integrate suppliers into their supply chains must personally ensure these suppliers not only operate according to economic principles but according to ecological and social guidelines as well.

Xcitec recognizes the importance of this topic and supports companies in implementing Corporate Responsibility aspects in supplier management. Xcitec standard software realizes Corporate Responsibility in all major supplier management steps – supplier qualification, supplier rating and supplier development. During supplier qualification, the supplier is extensively questioned regarding risk factors. CR aspects are integrated into the criteria catalog during supplier rating, and the supplier’s adherence to these is evaluated. Supplier development documents supplier optimization measures and monitors progress.

Xcitec supports suppliers’ sustainable adherence to Corporate Responsibility principles through integrating this aspect into all major supplier management process steps. Trust in suppliers is strengthened and risks are minimized.

Middle management can rest easy. According to a new online poll examining perceived threats to global outsourcing resistance from middle-management – a major issue in the early days of globalisation – is no longer public enemy number one. Instead wage inflation in India is now the major cause of headaches for decision makers across the business world.

The survey was carried out between March and April 2007 and canvassed the views of leading figures across 325 Fortune 1000 companies. Carried out by Syntel Inc. a global information technology services and Business Process Outsourcing (BPO) firm, the study asked participants to select one of five responses to the question “What is the single greatest threat to the global sourcing trend in 2007”.

The outcome? Nearly a third identified wage inflation in India as issue number one, with a further quarter believing it to be concerns over the quality.

That wage inflation on the Indian subcontinent ranked top is unsurprising. According to recent press reports, wage inflation in Indian IT services companies is growing at an approximate annual rate of 15 percent, a huge figure compared to the five percent growth reported in the US.

Despite concerns many companies did, however, express a view the inflationary rates are still at manageable levels, with many firms also conceding that the need to attract and retain top talent for their projects through outsourced vendor partners meant the burden of wage inflation had to be shared and funded through price increases.

A sure sign the quality of services are beginning to match the wages being paid can be seen with a three percent drop in just six months in the number of respondent citing concerns over quality. With the study suggesting the majority of IT firms are continuing to enhance their educational training and skills development offerings this figure looks set to drop further. Which, if the figures in the survey are to be believed, is exactly what has happened to fears over security and middle management resistance.

Bharat Desai, the chairman and CEO of Syntel, said: “We believe that no single overriding threat to global sourcing emerged from the Syntel poll because of the continued maturation of the industry.

“Global sourcing has gained acceptance in the business community and will continue to increase in momentum as smart corporations worldwide focus on enhancing customer satisfaction, driving innovation, and gaining competitive advantage.”

All of which must be music to middle management's ears.

Many said the launch of Vista would be make or break for Microsoft, and after announcing record third quarter figures it seems Bill Gates and his cronies have come up trumps again.

Microsoft’s revenue for the quarter ending March 2007 was $14.40bn – a huge 32% increase over the same period last year - and with the company’s net profits also rising from $2.98bn to $4.93bn, it seems despite the reservations surrounding upgrades and potential software conflictions, Vista, and the simultaneously launched MS Office 2007, are doing exactly what Microsoft hoped they would.

The constantly delayed launch of the new operating system, Microsoft’s first since Windows XP was introduced in 2002, had caused many analysts to question whether Vista was worth the wait.

However, although the recent figures suggest those fears have been allayed, many will rightly claim the success of the operating system was as inevitable as the rising sun given from January 30 nearly every new Windows computer will have come with Vista either preloaded, or with the promise of a free upgrade.

Scratch beneath the surface of Microsoft’s Q3 profits though, and the picture becomes a little less clear. According to reports between $1bn and $1.7bn in Vista sales had been deferred to the firm’s third-quarter in order to take into account the discounted upgrades given to PC buyers. Bill Gates has also warned that fourth quarter profits would be hit by deferred marketing expenses.

All-in-all a mixed bag for the software giant, but with these figures having gone a long way to putting Vista and Microsoft Office 2007 firmly on the technological map, the 10,000 staff who worked long and hard to get the product off the ground will be sleeping a little more soundly.