- The latest supplier scandal could have far-reaching implications for automotive, aerospace and any other supply chain dependent on aluminum or copper.
- Kobe Steel — Japan's third-largest steelmaker — admitted Sunday to having falsified data over the quality of parts it sold to more than 500 companies, ThomasNet.com reports. Its confirmed clients include the like of Toyota and Mitsubishi Heavy, Bloomberg reports.
- The scandal renews concerns over the falsification of data by suppliers to boost sales, or otherwise lacking quality control measures for supplies. Automotive News reports the scandal is expected to widely affect the industry's supply chain, and increase opportunities for trusted Tier 1 and Tier 2 suppliers.
It is a race to the bottom and we have no one to blame but ourselves.
Once we made the decision to measure economic success every day at 4 p.m. when the stock market closes, we gave up the moral high ground of doing the right thing. The pressure on the supply chain to reduce costs at all costs, and the associated financial pressure on management and employees, has created the environment where falsified reports from such companies such as Kobe Steel are commonplace.
I say save the outrage and let's look for more instances of this behavior. It’s all around us and we are but passive onlookers.
Righteous indignation? That ship sailed a long time ago, with ethics packed away securely in the hold. The stresses on organizations to perform on a razor’s edge begins with cutting corners and ends with a story on the front page. And the more these things happen the less we seem to care.
I saw an advertisement on the morning news this morning from Volkswagen. They seem to be doing fine these days. Takata airbags? Toyota seems to be doing fine as well. How about Equifax? If I were their CEO, I'd sit in front of Congress for a few hours if I could be thinking about my $90 million golden parachute.
Collectively, we’ve become numb to these scandals. Kobe Steel will be off of the front page in days, replaced by another scandal. Sorry, I’m cynical.
Sadly, this is not a new problem, but perhaps the scale has changed. In 1986, my neighbor who owned a custom semiconductor manufacturing company was prosecuted for falsifying quality records of the devices he sold to the U.S. government. With a wink-and-nod plea bargain all set, he was just waiting for his allocution in front of a federal judge, expecting to be resting at his lake home in a matter of days. Then, the Challenger exploded on that fateful 1986 day and the judge saw a link between falsified records and tragedies like Challenger. My neighbor died in prison.
Of course, most companies operate on the up and up and management and employees do their best every day to do the right thing. But these massive and long-term deceitful practices do have an effect: It forces us to raise cheating higher on our supply chain risk register, question everything, and fake surprise when one more company CEO begs our forgiveness.
Who will be next and how long will we care? After all, everyone does it. Right?