Apple and Global Business Environment Challenges

Introduction
Apple Inc. pays considerable attention to its conduct code. It wishes to ensure its offering is manufactured and sold in an ethical and efficient manner. The technology giant evaluates every element of its conduct code, personally undertakes audits for making certain its offering is produced correctly, and ensures the employees engaged in the manufacturing process are accorded ethical and fair treatment. Over time, the company has modified its conduct code a number of times for ensuring its goods are appropriately supplied to end customers. Suppliers who fail at complying with the corporation’s code simply end up endangering their dealings with the company. They may end up losing their license to manufacture and market Apple products (Moren, 2014; Apple Inc., 2017a). The company wishes to deliver to customers the entire package, and to guarantee their manufacturing process is eco-friendly. Finally, they wish to ensure their finished goods are in line with established standards.
List of specific changes that Apple has made to its Code of Conduct in recent years
i. Labor and Human Rights
Apple holds the belief that every supply chain member is worthy enough to be able to enjoy working in an ethical and just atmosphere. Every employee has to be accorded the right treatment, with extreme dignity and regard. Further, suppliers linked to the company ought to maintain the highest human rights standards. The company necessitates suppliers to refrain from discriminating against employees on the basis of aspects like age, sex, nationality, race, ethnic background, disability, marital status, political preferences, religion, union membership, gender identity, or sexual orientation, in organizational employment processes such as recruitment (Apple Inc., 2017a). Moreover, suppliers shall not demand the taking of health or pregnancy examinations (an exception here is when workplace safety rules or relevant laws call for it); further, the suppliers shall not engage in wrongful discrimination on test-outcome grounds.
Unreasonable working hours is one problem commonly plaguing the production sector. Apple’s policy, founded on Electronic Industry Citizenship Coalition and International Labor Organization (ILO) standards, restricts working hours in the organization to a maximum of sixty hours weekly; this is accompanied by a compulsory weekly rest day. In the year 2016, the company tracked weekly working hours of suppliers having approximately 1.2 million supply chain workers in their employ (Apple Inc., 2017b; Apple Inc., 2016). This year, it bettered its earlier result, attaining 98% supplier adherence to working hours over all workweeks. Its cross-functionally amalgamated initiative entails meticulous confirmation of every piece of information received from suppliers, under their standard appraisal.
ii. Environment
The company dedicates itself to environmental protection. Duty to the environment lies at the heart of Apple operations. Suppliers are expected to come up with, adopt and sustain environmentally responsible operational processes. Further, they need to adopt an efficient strategy geared at the identification, handling, reduction, and responsible disposal or recycling of toxic wastes (Apple Inc., 2017a). In the area of wastewater management, they are expected to adopt an efficient strategy geared at the identification, reduction and control of wastewater generated as a result of their operations. Lastly, they are expected to perform regular monitoring of wastewater treatment system performance.
In the year 2015, the company launched an end assembly supplier target of ensuring zero waste. Shanghai’s Tech-Com was found to direct to landfills or incinerate over 20% of its generated waste. Apple subsequently collaborated with it, together with the local recycler, and came up with a more efficient process to separate and recycle wastes. Consequently, as of now, Tech-Com recycles its entire waste (Apple Inc., 2017b; Apple Inc., 2016). Furthermore, Tech-Com designed a novel food waste management process; food wastes are now directed to local composters and not landfills. The company went one step further, utilizing their own experience to come up with a process to aid its own suppliers in gathering and reutilizing packaging material. Ever since this initiative’s commencement, Tech-Com successfully redirected over ten thousand metric tons of landfill-intended wastes and, in the year 2016, earned ‘UL Zero Waste to Landfill’ validation.
iii. Ethics
The company calls for first-rate ethicality standards in every effort. Its suppliers are required to maintain ethicality in all business areas, such as operations, business relations, procedures and sourcing. Suppliers need to apply due diligence when it comes to relevant supply chain material. They must come up with distinct management systems and policies for due diligence for determining relevant risks and implementing the right mitigation procedures. Due diligence ought to be carried out at the stage of mineral processing for ascertaining if the required minerals’ origins include high-risk areas (e.g., areas suffering under conflict, forced labor, horrendous child labor conditions, human trafficking, extensive sexual abuse, and other gross infringements of human rights and high risk behavior); risks also include severe safety and well-being related risks and adverse effects on the environment (Apple Inc., 2017a).
Apple Inc., in the year 2010, became one among the pioneers when it came to mapping corporate supply chains right from the level of production to that of smelter in case of 3TG (tin, tungsten, tantalum, and gold) (Apple Inc., 2016). Last year, it achieved cobalt-related mapping. Committed to constantly republishing 3TG smelters lists, Apple’s list now encompasses cobalt suppliers as well. For the 2nd consecutive year, every single identified 3TG refiner and smelter is engaged in individual 3rd-party auditing. Further, every cobalt refiner and smelter and is also engaged in such audits. As of last year, the company discontinued supply chain partnership with a total of twenty-two smelters (Moren, 2014). The company vows to continue breaking ties with entities incapable or unready to adhere to its superior standards. Year by year, it aims to expand its influence via supply chain entities, pushing for increasingly superior environmental and social standards.
Explanation of changes to suppliers
Apple, in the year 2013, performed a total of 451 supplier audits, a 51% increase compared to its previous year’s audit of 298 suppliers; these covered 1.5 million individuals manufacturing goods for the company. Apple discovered violations like discrimination and unsuccessful protection of child workers at these manufacturing units (Moren, 2014), causing it to alter its conduct code and coerce suppliers into rectifying the wrongs transpiring at their respective production sites.
Firstly, the maximum working hours per workweek will be fixed at 60 (this covers overtime); further, employees shall enjoy a minimum of one rest day per week, the exception being rare circumstances or emergencies. A regular workweek will have a maximum of 48 working hours. Suppliers are required to abide by every relevant rest day- and working hour-related rule and statute, with overtime being considered voluntary. Weekly working hour changes point towards Apple’s efforts at curtailing unreasonable workweeks at the Chinese Foxconn and other supplier sites. Extreme work hours are a pervasive problem in the overall production sector (Apple Inc., 2017b; Apple Inc., 2016). Although Apple has placed restrictions on its supply chain with regard to rest days and work hours, this alone cannot resolve the issue. Apple has been banking on weekly reporting and work-hour tracker for ensuring real-time modifications are made by its commercial partners and suppliers. In the year 2015, the above system enabled the company to accomplish 97% adherence across every workweek; the average weekly working hours of full-time personnel was found to be fifty-five.
All through its supply chain, Apple has been pushing for initiatives aimed at water conservation, replacement of hazardous chemicals, carbon emission minimization, and landfill waste elimination. One example of such an initiative is the previously mentioned ‘zero waste’ initiative intended to ensure landfills aren’t overflowing with waste. An iPhone end-assembly center, Foxconn Zhengzhou, had been found dumping considerable quantities of manufacturing wastes into landfills, monthly. Apple saw this as a huge chance at reducing the negative effect of its manufacturing of iPhones, which are undoubtedly the company’s most popular offering. The company, in collaboration with third-party evaluator Underwriters Laboratories, identified and classified Foxconn’s many waste streams. Manufacturing was found to account for almost eighty percent of overall waste generated by Foxconn; this included packaging bought from packaging material vendors (Moren, 2014). Thus, local managers came up with a grouping structure for assessing these materials, which resulted in increased recyclability and sorting efficacy. Moreover, they discovered means of better collaborating with parts sellers for improved regulation of inbound packaging shipments. Consequently, a few even reformed their packaging processes.
The company’s devotion to our world and humanity isn’t restricted to production. Joining forces with independent evaluators is one means for ensuring the organization’s smelter operations abide by the rigorous due diligence conditions placed by Apple. The company has pushed for constant growth in the number of refiners and smelters engaging in autonomous 3rd-party minerals audit. The year 2016 saw the company collaborating with the CCCMC (China Chamber of Commerce of Metals, Minerals and Chemicals Importers & Exporters) for designing a cobalt-specific 3rd-party audit initiative. With every refiner and smelter within the company’s supply chain for cobalt currently expected to engage in 3rd-party auditing, Apple will strive towards guaranteeing corrective steps are adopted for tackling identified problems. As of 2016, a total of 256 cobalt and 3TG refiners and smelters engaged in autonomous 3rd-party auditing (Apple Inc., 2017b; Apple Inc., 2016). In addition, the company performed numerous manufacturing supplier spot audits for gauging their grasp of due diligence prerequisites. Engagement in audit contributes effectively and continually to ascertaining refiners and smelters institute systems for source mapping and mapping likely linkages to major risks. In spite of attempts at aiding every refiner and smelter in grasping company requirements, the company discontinued dealings with refiners and smelters last year owing to their inability or refusal to abide by company standards.
A summary
Apple, for the 8th consecutive year, has published a comprehensive supply chain report. It has drawn up an all-encompassing supplier responsibility conduct code, which also features key points of its annual Supplier Responsibility Progress Report and a description of the improvements being made in collaborations with suppliers. The company has earlier faced censure for the work atmosphere at several supplier production units (e.g., Foxconn), including unethical practices like forced labor and child labor. Apple, in the year 2013, performed a total of 451 supplier audits, a 51% increase compared to its previous year’s audit of 298 suppliers; these covered 1.5 million individuals manufacturing goods for the company. The complete audit report has broken down discovered infringements (which include extreme work hours, unfair practices, and unsuccessful protection of juvenile labors), in addition to the steps suppliers are expected to adopt for rectifying those infringements. Further, environmental practices, particularly with regard to conflict minerals, were inquired into. The company claims every tantalum supply chain smelter is confirmed as conflict-free after 3rd-party audit. Other important areas to focus on include the company’s endeavors geared at ending extreme work hours: through 2013, suppliers of the company displayed 95% adherence, on an average, to the work hour ceiling of sixty hours, which was a 3% increase from the previous year. The company will evaluate supplier adherence to the code. All code infringements serve to only endanger the supplier’s commercial ties to the company, with the most severe action taken being termination of their business relationship. The code is applicable to all of the company’s suppliers, supplier subsidiaries, contractors and affiliates who deliver services or products to the company, or services or products to be utilized with or in Apple offerings.


References
Apple Inc. (2016). Apple Supplier Responsibility 2016 Progress Report. Retrieved from https://images.apple.com/supplier-responsibility/pdf/Apple_SR_2016_Progress_Report.pdf on 21 August 2017
Apple Inc. (2017a). Apple Supplier Code of Conduct. Retrieved from https://images.apple.com/supplier-responsibility/pdf/Apple-Supplier-Code-of-Conduct-January.pdfon 21 August 2017
Apple Inc. (2017b). Supplier Responsibility: Products made to have a positive impact. On the world and the people who make them. Retrieved from https://www.apple.com/supplier-responsibility/ on 21 August 2017
Moren, D. (2014). Apple's 2014 supplier report: Better working conditions, fewer conflict minerals. Macworld. Retrieved from http://www.macworld.com/article/2097723/apples-2014-supplier-report-better-working-conditions-fewer-conflict-minerals.html on 21 August 2017