A WBG-powered supply chain revolution
November 2, 2013 Editor 0
In my previous blog posts on Global Vale Chains (GVCs), I discussed the important role of lead suppliers in linking up with small and medium-size enterprises (SMEs). Since IFC is planning to work with anchor companies to influence supplier-SME relationships, I’m now looking into what type of anchor leads we should work with: those anchors whose business model is built around a Western-style, arm’s-length relationship, or those whose model and business style is based on joint trust, cooperation and support for their suppliers – using a type of keiretsu model (which seeks to enrich a relationship for mutual long-term benefits).
In other words: Should we work with those anchors that only check the inspection documents of suppliers’ factories, or with those who also examine the physical workplace and social well-being of their employees?
To achieve long-term socioeconomic benefits for all – especially to unemployed, unskilled and untrained workers – working with lead firms who embrace key elements of the keiretsu model simply makes sense in our development context. Such a model provides a much-needed upgrading for suppliers who hire such workers, offering clear benefit to them and their products by positioning them in a more relevant role in the GVC.
Categories: World Bank PSD
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