The SupplyChainBrain Podcast

Will we ever cut off the flow of contaminated product from China and other offshore manufacturing sites? The recent revelations surrounding Lumber Liquidators, which faces criminal charges for the alleged presence of the carcinogen formaldehyde in flooring made in China, are only the latest example of serious slip-ups in manufacturing quality control. It's tough enough to police one's overseas suppliers for violations of human rights in the workplace – and even more challenging to detect the use of unauthorized and potentially hazardous ingredients in toys, apparel, home furnishings and consumer electronics. On this episode, we speak with Ron Keith and Mark Medlen, executive chairman and chief operating officer, respectively, of Riverwood Solutions. They discuss the challenge that companies face in monitoring their suppliers' production lines, given the presence of 22 million factories in China alone, and the $40bn worth of goods imported by the U.S. from China each month. And they propose an answer to the question: Why does this keep happening?

The battle against cybercrime rages on. And global supply chains remain highly vulnerable. It should come as no surprise that the globalization of supply chains, resulting in the addition of many new trade and service partners, has made companies more susceptible to breaches of their information-security systems. Often they come in unexpected places, such as the HVAC contractor that was reportedly the point of entry for attackers who stole customer credit-card information from Target stores. On this episode, we speak with Steve Durbin, managing director of the Information Security Forum, who describes the scope of the problem, explains why so many companies are vulnerable to cybercrime, and lays out the steps they should be taking to shore up their systems against attack. The ultimate solution, he says, lies in the adoption of a carefully crafted risk-management program, in tandem with detailed contracts with suppliers who might otherwise be conduits to information breaches.

Creating an ethical supply chain is clearly the right thing to do. But it can also help companies to cut costs and boost profits. ''Beyond Supply Chains'' is the name of a new report from the World Economic Forum, produced in collaboration with Accenture. It was intended to address the growing pressure on companies to ensure that their supply chains are having a positive social impact on the environment and local communities. The timing couldn't be better, given the litany of incidents we've read about in recent years: child labor, terrible working conditions in factories, the reliance on conflict minerals, environmental degradation and disasters such as the collapse of the Rana Plaza factory complex in Bangladesh. So it's essential that companies take steps to correct these deficiencies. As the report points out, however, they can also realize substantial commercial benefits from the effort. We're joined on this episode by Mark Pearson, senior managing director of strategy and operations with Accenture, who talks about 31 proven practices that yield a ''triple advantage'': socioeconomic improvements in local communities, improved sustainability, and benefits to the bottom line. He argues that doing the right thing doesn't always entail a tradeoff between moral behavior and commercial concerns.

We're still waiting for many of the emerging markets of Latin America to emerge. What’s holding them back? Four big obstacles, according to a new report from Transport Intelligence on ''Latin American Transport Logistics 2015.'' For all its promise as a thriving center of manufacturing and logistics, supporting both domestic and international markets, the region continues to be held back by corruption, violence, poor infrastructure and government bureaucracy. (That last category includes restrictions on imports maintained by difficult countries such as Brazil.) Cathy Roberson, lead author of the Ti report, guests on this episode to discuss the progress – or lack of it – that Latin America has seen in the development of a logistics infrastructure that can support economic growth and ensure the efficient movement of product region-wide. At the same time, the report finds significant opportunities for business and trade willing to take a chance on Latin America. Find out why, in Roberson's words, ''the region’s biggest enemy remains itself'' – and what can be done about it.

The way in which buyers pay their suppliers hasn't kept up with the times. The result: an unacceptable level of global supply-chain risk. Big companies today are demanding that their customers pay quickly and on time. Yet when it comes to paying their suppliers, it's a different story. Buying organizations are stretching out terms, to the point where a supplier might not get compensated for services for nearly two months. For smaller entities, that delay can threaten their very survival. So why, in a time of economic recovery, are buyers treating their suppliers in this manner? And what can be done to satisfy both sides? In other words, what constitutes fair financing? We get some answers in a conversation with Joe Hyland, chief marketing officer of Taulia, a provider of invoice, payment and discount-management services to buying organizations. Learn how companies can cure themselves of this ''epidemic'' of supply-chain risk, caused by the practice of slow-paying suppliers. As Hyland puts it: ''The Holy Grail of invoicing is getting paid.'' Which demands the question: How?

All global companies will tell you that they're committed to guaranteeing human rights throughout their supply chains. But how do we tell they're sincere? When it comes to corporate social responsibility, human rights is on a par with environmental protection. Both have something in common: Companies agree that they're important, but it can be tough to assess whether their position stems from a real commitment to the issue, or a mere desire to polish their brand. A new report, published by The Economist Intelligence Unit and sponsored in part by the accounting, tax and advisory services firm of WeiserMazars LLP, tackles that very question. Entitled ''The Road From Principles to Practice: Today's Challenges for Business in Respecting Human Rights,'' it combines a global online survey of businesses with in-depth interviews of human-rights specialists. Joining us on this episode to discuss the contents of the report is Howard Dorman, WeiserMazars partner and U.S. leader of human rights for the firm. He talks about what it takes to make a real contribution to the cause of human rights, and how far global business has come in that effort.

Can we ever really know the Unknown? Or are we doomed to be forever surprised by economic, political and diplomatic upheavals? History suggests the latter. We never seem to have a grip on events that appear obvious in retrospect. Still, global business planners need to understand what might happen in crucial markets. It's a constant struggle to reach an impossible goal, but there are certain steps that managers can take to alleviate the pain, and maybe even be ready for some curve balls. Joining us on this episode is Amanda Mattingly, senior director of The Arkin Group, an international risk consulting and intelligence firm. A former foreign affairs officer at the U.S. State Department, Mattingly offers advice to companies on how they might cope with – and possibly even foresee – unexpected events. The future will forever remain unknown, but businesses can do a better job of preparing for it.

The imposition by UPS and FedEx of dimensional weight pricing on all ground shipments is bound to raise the price of moving parcels and packages. But there are ways that shippers can mitigate the increase. Up to now, dimensional weight pricing has been applied by the two big parcel carriers to air and express moves, as well as to packages greater than three cubic feet in size. As of the beginning of this year, however, the formula was extended to include all ground shipments. The idea is to charge shippers for the space that a package actually takes up on a truck. Boxes with lightweight contents or lots of filler will be especially impacted by the change. On this episode, we talk with Kevin Lathrop, president of Unishippers, a nationwide reseller of shipping services. He offers advice on how shippers can offset at least some of the increase. And he explains how the pricing change might actually yield benefits to shippers and manufacturers, in the form of reduced packaging materials and more efficiently designed products.

Who better to assess the most serious risks confronting global business today than one of the world's largest insurance companies? Each year, a few weeks before the World Economic Forum conference in Davos, Switzerland, Zurich Insurance Group co-produces a report on global risk. The 2015 edition marks the tenth year of the report, which began by merely identifying risks, but now analyzes the connections between them, along with the ''cascade effect'' of such events as natural disasters, economic crises and geopolitical strife. The result is one of the most comprehensive references available for businesses and supply chains engaged in global commerce. On this episode, we speak with Linda Conrad, director of strategic business risk for Zurich, who reviews the conclusions of the report as it relates to both developed and developing countries. She also discusses why this year's report marks a change in the list of top global risks.

Are the doors open to women looking to pursue a career in logistics? The answer is a qualified yes. Without question, the field of logistics has shed much of the sexism that marked it over the years. Changes in the business, driven by globalization, technology, the internet and a widening talent gap, have resulted in new opportunities for all prospective entrants, male and female. Still, it's not easy starting a logistics business from scratch – and learning about it as you go. On this episode, we talk with Sharon McWilliams, franchise owner of BlueGrace Logistics in Fair Oaks, Calif., just outside Sacramento. She describes her own path, which involved casting aside a career as a successful litigator in favor of owning a business about which she knew virtually nothing at the outset. She also touches on the issue of work-life balance that preoccupies so many professional women – and men as well, even though they're seldom asked about it.