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How predictive analytics can help end slave labor

Thor Olavsrud | June 18, 2015
Slavery may be illegal around the world, but the practice is alive and well. Whether you know it or not, it probably supports your modern lifestyle. Supply chain analytics can help companies discover forced labor and child labor in their sub-tier supply chains.

"There really aren't very good optics into sub-tier supply chains," he says. "It's very difficult to see beyond tier one."

For example, the metal tantalum, extracted from an ore called coltan, is essential to production of capacitors and high-power transistors found in most of the world's electronics, from mobile phones and PCs to automotive electronics. Much of the world's coltan comes from places like China, Malaysia, the Democratic Republic of Congo and Rwanda. And a lot of coltan mining is done with slave labor.

How Steve Jobs took action

"Seven years ago, our team wrote to Steve Jobs about tantalum," Dillon says. "We didn't really expect to hear anything back. But four hours later we got an email from him saying, 'I had no idea. I'll look into it.' They did look into it and they did do something about it."

"A lot of it is indeed not knowing, and more importantly not knowing where to start," Minahan adds. "What we feel we can do is deliver a model that provides the tools and high levels of transparency that helps you know where to start."

The Ariba Network consists of more than 1.8 million companies in 190 countries. It is the largest, most global business-to-business trading platform on the planet, Minahan says, with more than 76 percent of the Global 2000 using it to connect their global supply chains. Through the network, Ariba also has 16 years of transactional, relationship and community-generated data.

How analytics help

Made in a Free World's Forced Labor Risk Determination & Mitigation (FRDM) database maps the bill of materials of a vast number of products and services, broken down to their raw materials and labor inputs. By combining these data sources, companies will be able to use analytics to accomplish the following:

  • Evaluate their spending and supply chain against the FRDM database and get a view into areas where forced labor might exist.
  • Be alerted to potential future risks by triangulating a myriad of inputs -- like supplier performance ratings, payment history and more.
  • Identify alternative sources of supply with supply chain transparency and fair labor practices to help mitigate risks.
  • Access category-specific playbooks that provide a framework for detecting forced labor and outline actions to remediate it.

"In harnessing the connectivity and intelligence of networks like Ariba and Made in a Free World, companies can make more informed decisions about their supply chains that not only help their business, but make the world a better place," says Chris Haydon, senior vice president of Product Management at Ariba. "This isn't just a huge opportunity, it's a responsibility. Because at the end of the day, you can outsource processes and manufacturing, but you can't outsource accountability."

 

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