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OM in the News: Troubleshooting Intel’s Supply Chain in the Congo

April 6, 2015

congo minesAmerican manufacturers have for years been under pressure from Congress to avoid buying “rare earths” and minerals from rebel held mines in the Congo. Government commanders and rebel ­militias in the Democratic Republic of the Congo earn about $185 million annually through the illicit trade of gold and so-called 3T minerals (tin, tantalum, and tungsten)—crucial ­elements in consumer electronics such as cell phones and tablets. The revenue has financed a brutal ongoing conflict resulting in the deaths of millions of innocent people. Intel no longer wanted to contribute to an economy of suffering. Just recently, reports FastCompany (April, 2015), Intel became the first company to build microprocessors entirely from conflict-free minerals.

But controlling the supply chain process at Intel was not at all simple. Identifying how conflict minerals entered its supply chain was key to eliminating them. Smelting plants, where raw ore is refined, offered one place to trace the origin of minerals, if only the facilities would comply with a transparent auditing process.

Over five years, Intel’s supply chain director, Carolyn Duran, and her team visited 91 smelters in 21 countries, using Intel’s purchasing power to put pressure on smelters to develop and implement an auditing system to track minerals so corporate buyers can source responsibly. The result: Nearly half the world’s 3T and gold smelters have now passed conflict-free audits, shrinking the market for illegally traded minerals and reducing warlords’ profits. Intel hopes to be able to declare its entire product line conflict-free by 2016, inspiring other firms to do the same.

Classroom discussion questions:

1. Why are rare earths critical to the supply chain and which countries supply them?

2. Why did Intel try to set this precedent?

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