Global supply chains and social requirements: case studies of labour condition auditing in the People's Republic of China



The purpose of this paper is to (1) discuss the usability of labour condition auditing as a tool, (2) identify main differences between quality and environmental auditing and labour condition auditing and (3) define typical improvement areas in a high technology supply chain in the People's Republic of China (hereafter ‘China’). The increased interest in labour conditions of global supply chains has driven companies to integrate corporate social responsibility (CSR) into supply chain management (SCM) practices. Companies face legal requirements as well as voluntary social requirements. This paper focuses on the empirical part of labour condition auditing at selected factories during 2003 and 2004. Findings from these audits include non-conformances in health and safety, remuneration, working hours and disciplinary practices. Based on the experiences of the case studies, labour condition auditing is seen as a beneficial tool for inducing continuous improvement in supply chain management, but it requires a new set of skills from the auditors. Copyright © 2008 John Wiley & Sons, Ltd and ERP Environment.