Featured Review
Behind the Rise of Global Supply Chains"/>
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06th December 2022

Featured Review
Behind the Rise of Global Supply Chains

By Daniel Vaughan-Whitehead

Reviewed by Dr Damian Grimshaw

We know that global supply chains are not providing low- and middle-income countries with secure pathways for economic development, let alone decent employment. This fascinating new book by Daniel Vaughan-Whitehead helps to explain what is going wrong and recommends actions for positive, sustainable change.

Vaughan-Whitehead interrogates how the purchasing practices of powerful hub firms directly influence working conditions for people in supplier firms around the world. We have learned a lot already from detailed industry and firm studies by the likes of Sarah Ashwin, Stephanie Barrientos and Mark Anner, and we have gained many important insights about (non)compliance from Sarosh Kuruvilla. However, Behind the Rise of Global Supply Chains is the first large-scale, multi-industry, multi-region survey of global suppliers and is complemented by detailed case studies, that provides a raft of illuminating evidence.

There are three main takeaways from the Global Suppliers’ Survey: i) one in three suppliers report being unable to secure prices to cover production costs, which leads to difficulties paying wages and risks the company going out of business; ii) the suppliers that are highly dependent on the global hub (their only customer) report significantly lower wages than other suppliers; and iii) having a collective agreement or trade union provides a positive boost to wages paid in supplier firms, but only a minority of suppliers enjoy union recognition.

Microdata collected from 31 case studies in five emerging economies (Bangladesh, China, India, South Africa and Turkey) provide further rich insights into what is going wrong. Average wages paid by suppliers fall below the recommended living wage in all five countries, including less than two fifths of the living wage in Bangladesh, India and South Africa. This is alarming given the policy focus on global supply chains as a method to create jobs and boost living standards using organisations such as the World Bank. Working time is excessive in the sample of suppliers and, again, high-pressure purchasing practices are a major cause, including ‘too short lead times’ among others. Insufficient lead times also increased the probability of workplace accidents. Equally worrying, suppliers reported cutting corners in occupational health and safety practices to meet repeated buyer social audits without resources to improve matters.

Overall, this book is rich with empirical insight, novel explanations and contributions towards positive policy action. It will be of great interest to scholars of the changing face of globalisation and business practitioners, as well as policy experts.

Dr Damian Grimshaw is Professor of Employment Studies at London School of Economics.

Behind the Rise of Global Supply Change is available now in Hardback at a 25% discount. Enter code PROMO25 at checkout to redeem.

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