THE BLOG
27/11/2013 07:27 GMT | Updated 26/01/2014 05:59 GMT

Amazon's Warehouse Revelations Are a Reputational Issue

Secret filming inside an Amazon warehouse has shed light on how the way a business operates, even behind the scenes when fulfilling orders and preparing goods for distribution, can become a serious reputational issue...

Secret filming inside an Amazon warehouse has shed light on how the way a business operates, even behind the scenes when fulfilling orders and preparing goods for distribution, can become a serious reputational issue.

BBC TV's Panorama programme, 'The Truth Behind the Click', has broadcast secretly-filmed footage featuring an undercover reporter who was given a job as a 'picker' at the company's warehouse in Swansea. The reporter suffered blisters on his feet and felt pressurised by the targets he was given to 'pick' goods as part of the company's customer order fulfilment process.

While some of the allegations made in the film have been contested by Amazon, the film and its surrounding publicity will have left a dent in the online retailer's corporate image and this in turn is likely to have some impact on business performance.

In the highly-competitive, cost-driven world of online retailing, companies need to use every means possible to trim overheads and ensure the customer gets the best possible value for money. However, it is important that they see the bigger picture. This pressure to cut costs could cause businesses to take decisions that could compromise quality, for example, or jeopardise their commitment to sustainability.

Most corporates accept that sustainability and business performance are inextricably linked and for that reason it is critical to ensure that all parts of the supply chain and every aspect of business operations are visible and can be seen to be doing the right thing, all of the time.

In this case, Amazon has allegedly created a workplace which is placing its employees under considerable pressure and the negative publicity surrounding this is likely to affect consumer sentiment at an important time of year.

Earlier this year, the tragic Bangladeshi factory fire and building collapse, which led to the deaths of more than a thousand low-paid workers, created a reputational issue on a global scale for a number of US and European retailers. While in Amazon's case, the alleged shortcomings revealed in the BBC footage have been found a little closer to home - in one of their own warehouses - they are another reminder of what can go wrong if sustainability is not treated as a core element of business operations.

Maintaining supply chain visibility at all times is vital. When the drive for business efficiency becomes amplified it is easy for business leaders to become detached from day-to-day operations and lose sight of what is happening on the shop floor or in the procurement department, for example. They start setting targets for improving efficiency, without seeing the impact this might have on business performance in the long run.

Businesses that want to reduce their reputational risk in relation to matters of sustainability need to ensure maximum visibility across all operational areas. It may also be wise to adopt a training programme that recognises that some of the most vital decisions made in relation to sustainability are likely to be taken by people far down the chain of command.

By empowering people throughout the organisation to make the right decisions, based on a clear understanding of what the business stands for and its commitment to sustainability, will help to prevent reputational risks from arising in the first place.

Roy Williams is managing director at Vendigital a firm of supply chain consultants operating globally and across industry sectors.