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Extended Enterprise: Brands Corporate Cultures Management Systems Corporations Suppliers Audits Required Standard

A supply chain typically begins with the regulation of natural resources and extraction of raw materials. It includes several production and assembly links spread across multiple facilities of decreasing size located further away geographically. It ends with the consumer. Exchanges in the supply chain are usually between companies seeking to maximize their own revenue with little knowledge of other players. Large companies now integrate codes of conduct and social audits into their management systems to demand compliance from suppliers on issues like working conditions. Lack of transparency in the supply chain can enable socially irresponsible practices and make it difficult for supply chain managers to secure the best pricing when sourcing resources.

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AMAN KHANNA
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18 views1 page

Extended Enterprise: Brands Corporate Cultures Management Systems Corporations Suppliers Audits Required Standard

A supply chain typically begins with the regulation of natural resources and extraction of raw materials. It includes several production and assembly links spread across multiple facilities of decreasing size located further away geographically. It ends with the consumer. Exchanges in the supply chain are usually between companies seeking to maximize their own revenue with little knowledge of other players. Large companies now integrate codes of conduct and social audits into their management systems to demand compliance from suppliers on issues like working conditions. Lack of transparency in the supply chain can enable socially irresponsible practices and make it difficult for supply chain managers to secure the best pricing when sourcing resources.

Uploaded by

AMAN KHANNA
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Overview[edit]

A typical supply chain begins with the ecological, biological, and political
regulation of natural resources, followed by the human extraction of raw
material, and includes several production links (e.g., component
construction, assembly, and merging) before moving on to several layers
of storage facilities of ever-decreasing size and increasingly remote
geographical locations, and finally reaching the consumer.
Many of the exchanges encountered in the supply chain are therefore
between different companies that seek to maximize their revenue within
their sphere of interest but may have little or no knowledge or interest in
the remaining players in the supply chain. More recently, the loosely
coupled, self-organizing network of businesses that cooperates to
provide product and service offerings has been called the extended
enterprise.[5]
As part of their efforts to demonstrate ethical practices, many large
companies and global brands are integrating codes of conduct and
guidelines into their corporate cultures and management systems.
Through these, corporations are making demands on
their suppliers (facilities, farms, subcontracted services such as cleaning,
canteen, security etc.) and verifying, through social audits, that they are
complying with the required standard. A lack of transparency in the
supply chain is known as mystification, which bars consumers from the
knowledge of where their purchases originated and can enable socially
irresponsible practices. Supply-chain managers are under constant
scrutiny to secure the best pricing for their resources, which becomes a
difficult task when faced with the inherent lack of transparency. Cost
benchmarking is one effective method for identifying competitive pricing
within the industry. This gives negotiators a solid basis to form
their strategy on and drive overall spend down

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