The Impact of Supply Chain Management on Labor Standards: The Transition to Incessant Work

By Ciscel, David H.; Smith, Barbara Ellen | Journal of Economic Issues, June 2005 | Go to article overview

The Impact of Supply Chain Management on Labor Standards: The Transition to Incessant Work


Ciscel, David H., Smith, Barbara Ellen, Journal of Economic Issues


Logistics-comprising transportation, distribution channels, and warehousing-connects manufacturing and retailing. It, along with the retail sector, has replaced manufacturing as the core of modern industry. What used to be the minor area of inventory management now dominates the industrial marketplace because of the emphasis in the modern economy on flexibility and speed across long distances. And this transition is fundamentally changing work processes and the terms of work. The emphasis is on market incessancy: the tendency for output and employment markets to be always active.

The regimen enforced by the old manufacturing factories and the workers' resistances to the harshness of factory work life are now largely folk tales in the life of the working class. (1) In their place is the world of FedEx, a world driven by logistics required by global outsourcing. The marketplace has created all new work patterns: scheduling that requires 24/7 availability and instant relocation, terms of employment that vary from unpaid overtime to part time without benefits, and sweatshop working conditions where often the staffing agency employer of record knows nothing of working conditions at the actual work site. This new world of work is now only emerging from the mists of the transformation of the industrial landscape over the past quarter century.

This paper makes three intertwined arguments. First, factory production has been replaced by logistics (including transportation, warehousing, and distribution channels) and retailing as the dominant characteristics of capitalist production. Second, speed, flexibility, and incessancy of market activity have replaced the scheduled rhythm of the factory floor. Third, employers have created new labor processes for workers, resulting in new work schedules, new terms of employment, and new working conditions. (2)

Flexible Production

Several variables play parts in the transition from a manufacturing-based production system to that of a flexible, logistics-based system. (3) The changes in the system of production can be traced to globalism, outsourcing, and retailing power. While capitalism has always been international in its reach and scope, the term globalism actually refers to the capability of logistics in today's capitalist economy. In particular, transportation systems, the political accommodation of most nations to international trade, and the installation of a comprehensive information technology (IT) network allow manufacturing and assembly of production to be moved anywhere as needed for profitability. As the marketplace has spread out geographically, the logistics system and the quality of its management become critical for servicing the retail/final consumption sector.

Outsourcing has shifted corporate control from internally vertically integrated production systems, flowing from the upstream materials to the downstream consumers, to a system of "independent" producers, distributors, assemblers, and transporters. These outsourced functions provide the core corporation with components, products, or services to bring to market. IT, integrated with transportation companies that are free to cross international borders, provides the ability of the core corporation to monitor vendors' behavior, to control production and delivery, and to communicate production orders at remote factory sites.

And transportation, trade, and communications corporations, rather than manufacturing concerns, increasingly tend to be the core corporations directing and benefiting from this global production system. (4) Market power shifts to the logistics system and to retailing. Increasingly, corporations concerned with logistical systems (transportation companies, IT corporations, and retailers) control the design, volume, quality, and technological features of the products and services in the marketplace.

Streams or Bushes

The production process of manufacturing is linear.

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The Impact of Supply Chain Management on Labor Standards: The Transition to Incessant Work
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