I just read a great article in the May 2014 IndustryWeek magazine entitled “Safety in the Supply Chain:  No Easy Fix.” [note: if you are not a subscriber to IndustryWeek magazine, you can sign up for free].  The article, which was written by Jill Jusko, focuses primarily on the challenges faced by global brands and retailers who use contract manufacturers from across the globe and highlights various incidents of unsafe working conditions that have led to deaths.  It also states that inspections of these suppliers are on the rise.

What I found interesting about this article is that it identifies a fundamental tension that oftens faces many manufacturers.  On one hand, manufacturers seek to keep costs down by negotiating with their suppliers or even moving business from supplier to supplier without a great deal of familiarity.  On the other hand, manufacturers are dependent upon the quality of the product or service provided by the supplier particularly if the end product fails or is defective in some way.

This tension can cause all kinds of problems.  As the article mentions, negotiating a “tough” supply contract might lead to outsourcing by the supplier itself in part because the supplier made promises it can’t keep.  In addition, I have seen several situations (particularly in less regulated industries) where the manufacturer’s relationship with the supplier is so limited that the manufacturer has little or no knowledge about the processes that are employed at the supplier’s factory.  It is not uncommon for me to here that a manufacturer has never visited a factory of a supplier or conducted any type of audit, but rather, just relied upon the certification given by the supplier.

While in the normal course of business that might be sufficient, if litigation ensues against the manufacturer, it is often necessary to trace everything back to that supplier.  For that reason, it is important to continue to monitor your supply chain relationships so that you are not learning about your suppliers for the first time after a lawsuit has been filed.

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Photo of Jeffrey White Jeffrey White

I am a partner at Robinson+Cole who handles corporate compliance and litigation matters for both domestic and international manufacturers and distributors that make and ship products around the world. My clients have ranged from publicly traded Fortune 500 companies to privately held and/or…

I am a partner at Robinson+Cole who handles corporate compliance and litigation matters for both domestic and international manufacturers and distributors that make and ship products around the world. My clients have ranged from publicly traded Fortune 500 companies to privately held and/or family owned manufacturers. For those looking for my detailed law firm bio, click here.

I am often asked why I have focused a large part of my law practice on counseling manufacturers and distributors. As with most things in life, the answer to that question is tied back to experiences I had well before I became a lawyer. My grandfather spent over 30 years working at a steel mill (Detroit Steel Company), including several years in its maintenance department. One of my grandfather’s prime job duties was to make sure that the equipment being used was safe. In his later years, he would apply those lessons learned in every project we did together as he passed on to me his great respect and pride for the manufacturing industry.

Because of these experiences, I not only feel comfortable advising executives in a boardroom, but also can easily transition to the factory floor. My experience has involved a range of industries, including aerospace and defense, chemicals, energy, pharmaceuticals and life sciences, nutritional and dietary supplements, and retail and consumer products. While I have extensive experience in litigation (including product liability and class actions), I am extremely proactive about trying to keep my clients out of the courtroom if at all possible. Specifically, I have counseled manufacturers and distributors on issues such as product labeling and warranties, product recalls, workplace safety/OSHA, anti-trust, and vendor relations, among other things. I always look for the business-friendly solution to a problem that may face a manufacturer or distributor and I hope this blog will help advance those efforts.