The suppliers of big brand apparel and footwear retailers have contributed to the Better Buying Purchasing Practices Index, where they rate their clients anonymously
The collapse of the eight-storey Rana Plaza building in Bangladesh in 2013, which killed 1,134 workers and injured an estimated 2,500, was the garment sector’s worst disaster in living memory. It also exposed the poor working conditions behind some of the world’s largest fashion brands.
Under the glare of the world’s press, many clients have since increased their auditing activities, whilst publicly lobbying for better treatment of workers. But such initiatives are pulling at the seams of fashion’s other impulse: to slash prices and delivery times (from an average of 40 weeks to eight weeks in some cases), to keep up with the expectations of increasingly social media-influenced consumers.
“There is always an interest in getting products of better quality, faster, cheaper and with more embellishments, without thinking that somebody has to pay for that,” says Marsha Dickson, professor of fashion and apparel studies at the University of Delaware and co-founder of Better Buying, a global not-for-profit organisation that tracks the purchasing practices of the apparel and footwear industries.
Having researched the apparel sector for 25 years, Dickson had long argued that half of all non-compliance issues that brands grapple with in their supply chains – such as excessive overtime, unauthorised subcontracting and the hiring of temporary labour – could be traced back to their own purchasing decisions. Better Buying, a supplier survey part-funded by philanthropic organisations Humanity United and C&A Foundation, was created to shine a light on these issues. Amplifying the voice of suppliers, it marks a symbolic shift in the power relationship between brands and their supply chains.
The concept for Better Buying is simple. Suppliers fill out anonymous surveys on seven areas of client activity, including planning and forecasting, order placement, cost negotiation and payment terms. Brands and retailers have no choice in whether or not they take part in the index: if at least five suppliers file reports on them (that’s the minimum number to protect anonymity), their results will be benchmarked against an industry standard. Launched in spring 2018, Better Buying Purchasing Practices Index (BBPPI) already includes mega sporting brands Adidas and Nike, fashion brands Karen Millen, Bonmarché and Hobbs, and high street stores Marks & Spencer, Lidl and Kmart Australia.
At present, results are released to clients in private. But it’s possible that, within a few years, a star rating on a brand’s overall ethical performance could be made publicly available.
Before the advent of Better Buying, buyers might have argued that their own summits and surveys gave them a good understanding of their supply chains. But BBPPI findings suggest a lack of anonymity left most suppliers feeling too exposed to tell the whole truth.
The mirror that Better Buying is holding up to industry, on the other hand, is less than flattering. In BBPPI’s Q2 2018 ratings cycle, published last autumn, suppliers complained of late and reduced payments, and of having to maintain prices with no consideration for inflation. 61% reported that clients were not paying for samples. With planning and forecasting, 36% of suppliers complained they were left with unused capacity. Roughly half of suppliers said their clients missed important deadlines in the development process, especially during the pre-production stage.
There were also regional differences in planning and forecasting, with retailers and brands headquartered in Europe scoring much more poorly than their North American counterparts. Whereas 37% of North American buyers provided forecasts of 120 days or longer, only 17% of European buyers managed this. North American brands and retailers also updated their forecasts more frequently.
Strategic supplier treatment
The biggest surprise for Dickson was the discovery that buyers treated strategic suppliers the same – or even worse – than newcomers. “Even if they’ve had a relationship with a brand for 20 or 30 years, the suppliers are not confident they’ll have it next season,” she says. “And when we are seeing a difference [in how suppliers are treated], strategic suppliers report that they have to deal with more challenging purchasing practices than non-strategic competitors.”
Despite these unflattering findings, some brands and retailers have been actively promoting Better Buying to their supply chains. This was not part of the original plan, but is a welcome development, Dickson says, acknowledging that clients had been “a neglected voice” in the index until now.
She is encouraged that some brands and retailers have already set up strategic workshops in response to their BBPPI scores. To ensure that the data’s usefulness is maximised, clients will be invited to help develop and refine questions for future surveys. Dickson also plans to introduce confidential feedback between suppliers and buyers.
“We’ll ask suppliers to set out three areas where their clients could perform better, and ask them what they want tackled first,” she says.
Dickson admits some suppliers were initially reluctant to take part in Better Buying, partly because they were nervous of repercussions, and partly because they didn’t believe that reporting would make any difference. The index has increased its data security to provide extra reassurance, and supplier participation is now rising steeply. More than 300 suppliers from 38 different countries took part in the Q2 2018 reporting cycle. More than a third were based in China and Hong Kong, with a further 40% from Southeast Asia and 12% from Europe.
To further increase the reach of the survey, Better Buying ambassadors have been appointed in production hotspots such as Bangladesh. Industry organisations such as the Ethical Trading Initiative are also encouraging their members to take part.
Although Better Buying’s focus is primarily fashion, the survey is already spilling into other categories, driven in part by retailers with multiple product lines, including Target Corporation. “We’re already looking at patio furniture, microwaves, toys and dishware,” Dickson says. “We’re also getting a lot of interest from the food and beverage industry.” Additionally she sees an opportunity to engage with hotels, partly through their textiles and soft-goods purchasing.
Within two years Dickson expects brands to be comfortable enough to publish their scores, but cautions that suppliers wouldn’t want any publicity to damage their clients’ business.
“If a public score results in reduced sales, that’s a problem for everyone in supply chains,” she says. “We need to think about mutually beneficial outcomes. Better buying really means better business. It’s not just better workplace conditions, it’s more efficient business and more sustainable, stronger partnerships.”
The Better Buying Index is pushing fashion towards transparency. The metamorphosis won’t be easy, but it’s a start.
The buying choices of procurement professionals in the fashion industry have an indirect effect on millions of people working in garment and footwear factories across the developing world. While many brands have acted to improve working conditions, there is still much work to be done.
According to a European Parliament report, these are the key areas of concern:
Workers face long hours, often without weekly rest days and no extra pay for overtime. Many do not have regular contracts.
Health and safety
Buildings not designed for commercial work are often poorly modified to become factories. Other problems include a lack of protective equipment and fire extinguishers, poor electric wiring, blocked fire exits and barred windows.
Factory owners often suppress trade unions and intimidate union organisers. “Some claim they have been beaten up,” says the European Parliamentary report.
A lack of regular contracts means that injured workers or relatives of workers who die receive no compensation.