Supply Chain and Apple

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Apple Supplier Code of Conduct

Apple Inc.'s Supplier Code of Conduct delineates the company's high standards for generating safer work settings, treating employees equitably, and making use of environmentally responsible practices. The company has made significant strides to form one of the most stringent codes of conduct within the industry and more often than not necessitates practices that go above and beyond the local rules and regulations. The company's suppliers are obligated to be in compliance with the Code of Conduct by meeting the strict requirements in Apple's Supplier Responsibility Standards (Apple Inc., 2017). This paper discusses the distinctive changes that Apple has made to its Code of Conduct in the past few years.

Accountability

Through audits, Apple is able to build the competencies of its suppliers. The company does this through an established four-phase procedure to facilitate them in being compliant with the Code of Conduct. The first phase is audit prioritization. Apple employs a risk-based method to select which suppliers to audit. The company takes into account aspects such as business, social, environmental, health and safety risks of an entity. In turn, the audits are ranked on the basis of geography risk, product risk, and prior audit performance. In particular, Apple examines apprehensions presented by external stakeholders. Every entreaty is appraised based on urgency (Apple Inc., 2017). The second phase is the onsite audit. Each audit is steered by Apple with the help of a local third-party specialists who have been educated on the company's auditing code of behavior. This encompasses interviewing personnel, assessing several payroll documents, physically evaluating the health and welfare circumstances of the facilities, and scrutinize internal and external environmental conditions. More so, the company investigates core violations that are not tolerated by Apple, taking into account underage personnel, falsification of documents and intimidation of employees. Between 2007 and 2015, the annual Apple audits have substantially increased from 39 to 640 and this covered more than 1.6 million personnel. In particular, there were approximately 140 first-time audits across Apple's supply chain spanning 25 nations. To the present moment, Apple has terminated agreements with 20 suppliers, owing to core violations (Apple Inc., 2017).

The third phase is addressing issues. Suppliers that have not been compliant to the code of conduct are obligated to submit a Corrective Action Plan in the course of the 14 day audit, delineating the manner in which they will resolve the issues found. In turn, Apple substantiation experts work in tandem with suppliers, undertaking checks after 30, 60 and 90 days to ascertain the progress (Apple Inc., 2017).

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The final phase is verifying improvement. Subsequent to a 120 day period, third-party auditors make an official visit to ascertain that all aspects in the original Corrective Action Plan was executed in accordance to the company's standards. If this is not the case, then a second verification audit is done in 30 days. Having worked in tandem with its suppliers rather than solely controlling them, Apple Inc. has considerably augmented their compliance (Apple Inc., 2017).

Labor and Human Rights

Another key aspect of supplier responsibility encompasses labor and human rights. Apple does not allow bonded labor, which takes place when personnel pay employment fees prior to obtaining any salary. In the event of such instances, suppliers are forced to repay the employee such fees. In the past 8 years, this has given rise to over 25.6 million dollars reimbursed to employees, with 4.7 million dollars solely being in the 2015 fiscal year. To deal with this, Apple works in tandem with the International Organization for Migration (IOM) to establish a program that enlightens on different aspects such as their rights and responsibilities, terms of agreement, reported illegal practices and abuse. In addition, Apple condemns underage labor amongst its suppliers. If any of the suppliers are found having underage children working in their factories, they are obligated to return them to their households, pay for their education in institutions selected by the family and provide compensation for basic necessities to the point they attain the legal age limit. For instance, in 2015, three instances of underage labor were discovered and dealt with (Apple Inc., 2017).

A key concern in supply chain within the whole manufacturing industry is excessive working hours. In Apple's supply chain, working hours are restricted to 60 hours every week with a compulsory resting day every week. In addition, the company utilizes work-hour tracking component and weekly reporting so as to instigate changes in real time. For instance, in 2015, the company experienced a 5% improvement in supplier compliance to 97%. Moreover, Apple is dedicated to sourcing its raw materials in a responsible manner. In particular, the company is striving to make certain that minerals utilized in its products do not fund any kind of armed conflict. Rather the company believes it is vital to work in tandem with them to facilitate change. For instance, in December 2015, subsequent to five years of fervent endeavor, all of the acknowledged.....

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