Jumping the Chain: How Downstream Manufacturers Engage with Deep Suppliers of Conflict Minerals

Steven B. Young, Shannon Fernandes and Michael O. Wood
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Steven B. Young: School of Environment, Enterprise and Development (SEED), University of Waterloo, Waterloo, ON N2L 3G1, Canada
Shannon Fernandes: School of Environment, Enterprise and Development (SEED), University of Waterloo, Waterloo, ON N2L 3G1, Canada
Michael O. Wood: School of Environment, Enterprise and Development (SEED), University of Waterloo, Waterloo, ON N2L 3G1, Canada

Resources, 2019, vol. 8, issue 1, 1-24

Abstract: Global manufacturing firms are engaging distant suppliers of critical raw materials to participate in responsible sourcing. Downstream firms are concerned about risks in mineral supply chains of violent conflict, human rights violations, and poor governance, but they are limited in seeing their suppliers. Descriptive data on 323 smelters and refiners of tantalum, tin, tungsten, and gold (the “conflict minerals”) were complemented by interviews with downstream firms in the electronics industry. Results provided a narrative of supplier engagement, describing tactics used to identify “deep suppliers” at chokepoints in metals supply and to persuade producers into joining due diligence programs. Top-tier firms collaborate through a standards program to overcame barriers of geography and cultural distance in supply chain management beyond the visible horizon. Curiously, manufacturers do not need line-of-sight transparency to lower-tier suppliers. Rather, top-tier firms are “jumping the chain” to engage directly with “deep suppliers” who may—or may not—be their own actual physical suppliers. The research contributes empirical evidence to understanding multi-tier supply chains, examines how power is exercised by top-tier firms managing suppliers, and provides insights on supply chain transparency. Responsible sourcing, based on due diligence guidance and standards, is becoming expected of companies that are involved in supply chains of raw materials.

Keywords: responsible sourcing; supply chain due diligence; multi-tier supply chains; transparency; sustainable supply chain management; critical raw materials (search for similar items in EconPapers)
JEL-codes: Q1 Q2 Q3 Q4 Q5 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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