The main disadvantage to a company for using a supplier exposed to unethical practices is the loss of competitive advantage. This is due to the fact that currently, customers are placing more importance on transparency. According to i-Sight (2010), consumers explore more on all the organization’s practices to ensure that the organization uphold the necessary supply chain ethics. Therefore, use of suppliers exposed as having used unethical practices is damaging to the company because it tarnishes the organization’s good name in marketing. In addition, a number of customers may not be willing to do business with organizations that use such suppliers.
The effects of the unethical practices by the supplier can be damaging to the organization. Damaged products due to supplier are always passed to the organization. For example, in 2010 HP was forced to recall batteries due to incidents where batteries overheated and others caught fire. Whereas these products are produced by a supplier, consumers hold the company responsible for the loss (i-Sight, 2010).
Technology is very useful in cutting cost and expenses. Many customers are therefore using technology to improve the supply chain (Epiq, 2010). The Enterprise Resource Program (ERP) which is very useful in supply chain is also very useful in other organization’s activities making all the activities very efficient and integrated.
Epiq (2010) also noted that technology is very important in supply chain management. This is because technology allows business organizations to work together in sourcing. This collaboration results in huge profits thereby giving the company an opportunity to use only the best supplier (ISM, 1999). The common interest of the collaborating organization helps in identifying the best supplier and therefore the organizations become more socially responsible.
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