Auditing conflict materials free suppliers and cost impact

An article in the Wall Street Journal (October 9, 2012) describes the number of conflict materials free smelters as 27 out of 200 to 400 worldwide. With the Dodd-Frank law demanding that companies declare the extent of use of tin, tantalum and tungsten from Democratic Republic of Congo in their supply chains, pressures to get conflict free sources are expected to cost between $3 to $4 billion in year 1 and $200 to $600 million in subsequent years in audit costs. Should firms focus on getting to conflict free or declare the audited level of conflict free sources ? Will firms that save costs and declare a less than conflict free supply chain face a competitive disadvantage even if they offer lower prices ? Should customers be allowed to choose their extent of preference (for conflict materials free supply chains) or should zero tolerance be enforced ?

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About aviyer2010

Professor
This entry was posted in Global Contexts, Supply Chain Issues, Sustainability and tagged , , , , , , . Bookmark the permalink.

One Response to Auditing conflict materials free suppliers and cost impact

  1. Typically necessity is the mother of invention, but it has to be a need. I think an “outside the box” solution is the most likely scenario: how do we avoid using these rare earth metals all together? Are there inferior quality alloys that can do the job, too?

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