CPIM Practice Exam

What is a key reason supply chain partners are emphasized by the UN Global Compact?

1. They ensure compliance with regulations.

2. They can motivate suppliers in low-cost labor countries.

3. They minimize operational costs.

4. They enhance product quality.

The correct answer is: They can motivate suppliers in low-cost labor countries.

One of the key reasons that supply chain partners are emphasized by the UN Global Compact is their ability to motivate suppliers, particularly in low-cost labor countries. This motivation is essential because it promotes ethical labor practices, environmental standards, and overall responsible business conduct. The UN Global Compact encourages companies to align their operations and strategies with universal principles on human rights, labor, environment, and anti-corruption. By fostering strong relationships and motivating suppliers in regions where labor regulations may be minimal or poorly enforced, companies can drive improvements in working conditions, fair wages, and sustainable practices. This approach not only benefits the suppliers but ultimately enhances the entire supply chain's resilience and reputational strength. In contrast, while compliance with regulations, minimizing costs, and enhancing product quality are all important aspects of effective supply chain management, they do not directly capture the unique role of supply chain partners as motivators for responsible practices in low-cost labor markets as highlighted by the UN Global Compact. Compliance often focuses on meeting existing laws rather than proactively encouraging improvements. Reducing costs and enhancing quality are crucial business objectives, but they are not specific to the mission of promoting ethical engagement in the workforce and supply chain sustainability as outlined by the UN initiative.