Responsible sourcing to avoid the "Nike Moment"

Last year Apple was facing a 'Nike Moment' after several reports in the press alleged that Apple's suppliers in China had been treating workers unfairly. The so called 'Nike Moment' was created in the 90s when independent reports from NGOs revealed inhuman conditions at a number of its suppliers - and which the company initially tried to disown, saying conditions were the companies' responsibility. Nike suffered a 69% drop in earnings and was boycotted on many university campuses. Then the company began working with oversight agencies and had to rethink their suply chains. Any kind of negative publicity is called the 'Nike Moment' in industry today.

Foxconn factory in Shenzhen

Foxconn, Apple's supplier in China, employs about 1.2 million workers at a handful of plants in China, the majority of workers are employed at an enormous complex in the southern boomtown of Shenzhen. This is run with almost military discipline - staff work for six or seven days a week and for up to 14 hours a day. The workers assemble iPhones and iPads for Apple, Xbox 360 video game consoles for Microsoft and computers for Dell and HP. Foxconn is one of China's largest single private employers.

In 2010 and 2011 there was a series of suicides at the Foxconn plants, which drew attention to the stress many young workers were under. In February 2012 dozens of workers assembling the Xbox climbed to a factory roof in the central chinese city of Wuhan and some threatened to jump to their deaths amid a dispute over job transfers. After these negative reports Apple began to take working conditions at supplier companies more seriously.

This example shows how critical sourcing decisions can be. The OEM's responsibility for the final product starts at the very beginning of the supply chain. When customers read about bad conditions in supplier factories in the paper, companies are often forced to react quickly in order to avoid a 'Nike Moment'. But still too many customers just ignore these facts, go to Amazon and watch out for the lowest price. This is the way capitalism is supposed to work...