Case Study Information

3DMall had a significant supply chain failure when a humanitarian crisis related to refugees created issues with regular supply of printers from Turkey to the EU and Africa. While there was no one disaster to recover from, there were ongoing issues of plant shutdowns due to missing supplies or late deliveries due to traffic congestion and high scrutiny in clearing customs. This ongoing crisis showed the organization that they needed to have a more formal and organization-wide risk management strategy. To this end, they hired a new VP to be accountable for integrating risk management systems across the organization and model risks to understand their probabilities and potential impact. The process resulted in new contingency plans and preventive actions. Next, the organization needs to carefully consider how much of the supply chain should be involved in risk strategy, management, and integration. 3DMall had sustainability as part of its mission from the start and invested in low energy use buildings for its headquarters and warehouses. However, the initial period of rapid growth proved difficult to manage and it was unclear whether any external partners were complying with sustainability policies. Early on, their primary manufacturer started subcontracting to increase capacity, which was allowed under the contract, but the contract did not specify whether or not subcontractors needed to comply with the organizations sustainability policy. After a subcontractor had a negative impact labor incident, the organization decided to prioritize its goals of working only with suppliers who could be proven to adhere to ethics and sustainability policies. Rather than auditing all of these subcontractors, 3DMall decides to invest in the main Thailand manufacturer and refit the plant for cartridge production only, then open printer plants in Mexico and Turkey to service North America and the EU respectively. This is seen as a good opportunity to set up better policies and controls related to external partner sustainability. The organization is also more profitable at this point so it can afford to invest more in sustainable production including fair regional wages and use of local suppliers to each plant whenever feasible. The organization believes that if they successfully implement these policies and controls it will not only be good for workers, local regions, and the environment, but it will also reduce costs in the long term while increasing sales by marketing the products as sustainable. However, this time around simple assurances from external partners will not be enough.

Question 1 of 5: If the organization works with its independent manufacturers to coordinate risk identification and response, what might require them to also work on risk with their suppliers and those suppliers' suppliers?

The organization wants to get an environmental certification from an accredited third party.

The product contains ignitable, corrosive, reactive, or toxic materials.

The product contains tantalum, tin, gold, or tungsten.

The organization is required to take back their product at end of life, at least in the EU.

Question 2 of 5: What might be another reason that 3DMall would want to perform due diligence with its suppliers' suppliers?

Suppliers' suppliers are a major origin point of many supply chain disruptions.

Working on supply risks is typically the least mature category of supply chain risk management maturity at organizations.

Suppliers' suppliers are a major source of the known risks for organizations and so can help quickly develop a complete risk register.

Suppliers' suppliers often can be the recipient of risk transfer for an overall supply chain savings.

Question 3 of 5: What was likely the biggest obstacle that prevented 3DMall from living up to its vision of a sustainable supply chain in its first few years?

They were too focused on short-term economic performance.

The organization had a flaw in its contract related to subcontractors and their need to follow ethics and sustainability policy.

The use of subcontractors should not have been allowed.

Buildup of large anticipation inventory of common product family components for postponement in the initial launch phase.

Question 4 of 5: While contracting with the two new third-party plants for their printer manufacturing and refitting the Thailand plant, what is the most effective thing the organization can do to ensure sustainable practices will become part of these organizations' standard operations?

Require that they develop their own ethics and sustainability policies and controls.

Collaborate on economic, social, and environmental metrics and give feedback.

Perform a scheduled audit every three years.

Request they use the Global Reporting Initiative framework to prove compliance with the organization's ethics and sustainability policies.

Question 5 of 5: What should 3DMall do about these gaps in compliance with social and environmental metrics if the organizations complain that they cannot currently meet them while also meeting the economic metrics?

Acquire new manufacturers.

Pay more per unit.

Get them to develop remediation plans with a feasible timeline.

Develop remediation plans for offenders with a deadline that results in contract termination if they miss the deadline.