Study Case Otis

from the Stanford Global Supply Ghain Management

Forum suggests that better measurement systems, new

models, and greater emphasis on the social side of the

equation can help to advance supply chain responsibility

to the next level.

We've Come a Long Way

The Forum recently reviewed the SER practices found in

the supply chains of 20 leading companies. (See accompanying

sidebar on "About the Research.") Looking

across the entire value chain, we examined what social

and environmental activities those companies have

implemented within their product design and development

(including end-of-life), sourcing, manufacturing/

operations, and logistics areas.

One way to understand where we are today is to think

of SER supply chain activities along a continuum that has

three distinct stages, as depicted in Exhibit 1. We describe

companies at the first stage as ''Good Gitizens"--they

make an effort to comply with existing rules and regulations.

Although vigilant in their efforts to follow the rules,

most don't attempt to move beyond the status quo. The

hallmark of this stage is a strong emphasis on compliance.

Over time. Good Gitizens may expand and improve their

responsibility activities to the point that they reach the

second stage: what we label "Movers and Shakers." At this

stage, supply chain managers are focused on increasing the

scope of their SER initiatives and modifying their existing

EXHIBIT 1

Supply Chain SER Continuum

* Comply with SER rules

and generally accepted social

norms (e.g., do things the same).

* No attempt to go beyond

status quo.

* Home Depot expects first tier

suppliers to "provide a safe and

healthy work environment."

* Procter & Gamble requires

suppliers to comply with existing

environmental regulations.

* Expand scope of SER activities

and improve SER practices

(e.g., do things better).

* Improve SER practices. Go

beyond current regulations, but

do not implement structural

changes.

* Hewlett-Packard expanded

scope of code of conduct to

include all direct