The retailer’s cancelling of contracts, after allegations of exploitation, highlights monitoring issues, writes Roland Gribben of the Telegraph

“Supply chain issues have moved higher up the boardroom agenda as the credit crisis bites deeper amid fears that the economic slowdown will accelerate into a full-blown recession. The conventional safety kit in the shape of belt-tightening and cost-cutting is being rolled out but the uncertainties about the depth and length of economic turbulence leaves most businesses facing a considerable dilemma.

The procurement function has a higher priority and suppliers are under intense pressure to cut costs and accept tougher contract terms at a time when supply chain strategy is assuming new dimensions and the Primark case - contracts were cancelled with an Indian supplier after allegations of labour exploitation - highlights the ethical and monitoring issues and dangers tied to outsourcing in low-cost countries. “I can hear other companies saying ‘there but for the grace of God go I’,” said an industry executive.”