Oxfam: Unilever progresses on labour rights in Vietnam, but much more to be done
A new report published today by Oxfam finds Unilever's overall commitment to labour rights in its Vietnam supply chain has improved over the last three years, but that significant challenges remain.
The report follows a previous study in 2013 which highlighted the gap between the company's policies and the reality on the ground for workers of precarious work, low wages and excessive working hours, which Oxfam says are endemic in global supply chains like these.
The multinational company allowed Oxfam access to its staff, operations, data and key suppliers at its factory in Cu Chi, near Ho Chi Minh City, which manufactures personal, home care, and food products.
Evidence of Unilever's improved commitment to labour rights includes regular dialogue with trade unions at a global level, better sourcing policies, increased trust between workers and management and a commitment to more direct employment in its manufacturing operations, bringing greater job security and employment benefits.
However, the review also showed there is a lot more to be done to achieve sustained positive change for workers making its products in Vietnam and other parts of its supply chain, something the company acknowledges.
The study found that wages of a typical semi-skilled worker in Unilever's factory had increased 48 percent between July 2011 and July 2015, helped by government increases in the minimum wage, but lower skilled workers with dependants said they still struggled to make ends meet.
Oxfam also found that more people were directly employed in the company's factory. However, the percentage of women was down from 19 percent in 2011 to 13 percent in 2015 whilst women made up two thirds (67 percent) of those employed by a third party supplier with lower wages and benefits.
In the supply chain, the report highlights that suppliers are much more aware of Unilever's expectations on labour standards, but lacked guidance on how they can deliver on these and meet commercial requirements at the same time, with four out of five suppliers believing better standards would cost them more.
The report recommends that Unilever steps up its efforts to ensure gender equality in its manufacturing operations and do more to influence the wider system affecting labour rights, from worker representation and business practices to engaging with governments.
Rachel Wilshaw, Oxfam's Ethical Trade Manager, said: "It's unusual for a multinational company to open up its business to Oxfam in this way and shows great transparency and openness to improve. It's clear that the process has already brought positive change within the company and most importantly for the people making its products, and has the potential to deliver much more.
"Yet huge challenges remain for multinational companies to ensure workers enjoy good jobs on a living wage, with opportunities for women to progress. Unilever has recognised the need for companies to do business differently. All too often companies feel pressure to put containing costs above better labour standards. Ways need to be found for workers, farmers and communities to get a fairer share of the value that business generates, and women's empowerment should be embedded in that strategy.
"Oxfam would like to see Unilever use its power to influence other companies, and governments, to tackle the root causes of poor labour standards. But it is also time for these companies to step up and follow Unilever's lead."
Download a copy of the report Labour Rights in Vietnam: Unilever's progress and systemic challenges
Gartner: Leaders Lack Skilled Smart Manufacturing Workers
With organisations rapidly adopting industry 4.0 capabilities to increase productivity, efficiency, transparency, and quality as well as reduce cost, manufacturers “are under pressure to bring their workforce into the 21st century,” says Gartner.
While more connected factory workers are leveraging digital tools and data management techniques to improve decision accuracy, increase knowledge and lessen variability, 57% of manufacturing leaders feel that their organisations lack the skilled workers needed to support their smart manufacturing digitalisation plans.
“Our survey revealed that manufacturers are currently going through a difficult phase in their digitisation journey toward smart manufacturing,” said Simon Jacobson, Vice President analyst, Gartner Supply Chain practice.
“They accept that changing from a break-fix mentality and culture to a data-driven workforce is a must. However, intuition, efficiency and engagement cannot be sacrificed. New workers might be tech-savvy but lack access to best practices and know-how — and tenured workers might have the knowledge, but not the digital skills. A truly connected factory worker in a smart manufacturing environment needs both.”
Surveying 439 respondents from North America, Western Europe and APAC, Gartner found that “organisational complexity, integration and process reengineering are the most prevalent challenges for executing smart manufacturing initiatives.” Combined they represent “the largest change management obstacle [for manufacturers],” adds Gartner.
“It’s interesting to see that leadership commitment is frequently cited as not being a challenge. Across all respondents, 83% agree that their leadership understands and accepts the need to invest in smart manufacturing. However, it does not reflect whether or not the majority of leaders understand the magnitude of change in front of them – regarding technology, as well as talent,” added Jacobson.
Technology and People
While the value and opportunities smart manufacturing can provide an organisation is being recognised, introducing technology alone isn’t enough. Gartner emphasises the importance of evolving factory workers alongside the technology, ensuring that they are on board in order for the change to be successful.
“The most immediate action is for organisations to realize that this is more than digitisation. It requires synchronising activities for capability building, capability enablement and empowering people. Taking a ‘how to improve a day in the life’ approach will increase engagement, continuous learning and ultimately foster a pull-based approach that will attract tenured workers. They are the best points of contact to identify the best starting points for automation and the required data and digital tools for better decision-making,” said Jacobson.
Long term, “it is important to establish a data-driven culture in manufacturing operations that is rooted in governance and training - without stifling employee creativity and ingenuity,” concluded Gartner.