Can Your Supply Chain Answer, "Who Made My Clothes?"
April 24th marks the 4th anniversary of the horrific Rana Plaza garment factory collapse in Dhaka, Bangladesh. In the years since, the incident has sparked a worldwide movement called Fashion Revolution, whose mission it is to advocate for greater transparency in the fashion industry’s supply chain.
April 24th has thus become known as Fashion Revolution Day, and starting in 2014, millions of consumers in over 90 countries around the world have asked their favorite brands: “who made my clothes?” The associated hashtag, #whomademyclothes, went viral over social media, and last year, in April 2016, Fashion Revolution achieved an online reach of 22 billion.
It’s poised to grow this year.
Like It or Not, Greater and Greater Pressure for Supply Chain Transparency is Here to Stay
Fashion Revolution might merely seem like a social movement, but apparel executives should take heed: Fashion Revolution is single-mindedly about supply chains, taking operational issues like visibility and traceability and putting them under a scorching public spotlight.
G-Star Raw, American Apparel, Fat Face, Boden, Massimo Dutti, Zara, and Warehouse were among 1200 fashion brands that responded to #whomademyclothes with pictures of their workers stating, “#Imadeyourclothes.” It was a nice response, but it won’t be enough to placate the desire for transparency.
Fashion Revolution understands the complexity of supply chains. It releases an annual Fashion Transparency Index, which ranks brands on supply chain issues like tracking and traceability, and engagement and collaboration.
Here’s an excerpt from their section on supply chains:
Fashion supply chains are typically long and very complex. Some brands may work with thousands of factories at any given time – and that is just the facilities that cut, sew and assemble our garments, but there are also further facilities down the chain that dye, weave and finish materials and farms that grow fibres too. During the manufacturing process our clothes are touched by a great many pairs of hands before they reach the rails or shelves of the shop floor.
Many companies do not really know where their clothes are being made. The vast majority of today’s fashion brands do not own their manufacturing facilities, making it difficult to monitor or control working conditions throughout the supply chain. A brand might place an order with one supplier, who carves up the order and subcontracts the work to other factories. This happens regularly across the industry and presents a great challenge for brands themselves as well as the people working in the supply chain who become invisible in this process.
That piece accurately captures the challenges fashion companies face when trying to become more transparent.
There isn’t a silver bullet to increase transparency. It’s a multilayer problem. But that doesn’t mean brands should stay stymied and not begin to act. Because consumer pressure isn’t about to let up.
Assembling Transparency, One Piece at a Time: Visibility, Supplier Collaboration, and Supplier Financing
Verifying ethical supply chain conditions will require a combination of measures, including audits, technology, and social, economic, and business incentives.
But here are a couple steps businesses can take to get started:
- Network the supply chain. We often talk about supply chain visibility, and how connecting all your supply chain partners onto a single network can improve business efficiency by breaking down information silos. The added benefit of using technology for things like supplier collaboration, though, is transparency. When n-tier suppliers are linked together, even for explicitly business reasons like order collaboration or factory management, there’s greater clarity as to who is involved at every stage in the process. By itself, this doesn’t guarantee ethical practices, but it does increase accountability at every node in the supply chain—a major improvement.
- Implement supplier financing. Supply chain finance is a drastically underutilized tool that can be very powerful for incentivizing ethical production, while also improving cash flow. Companies like Levi’s and Puma are notable examples of fashion brands who have not only prioritized ethical and sustainable production, they’ve partnered with institutions like the IFC to economically incentivize good behavior from suppliers. Incidentally, Levi’s ranked among the highest brands in last year’s Fashion Transparency Index.
The nice thing about these two steps is that by focusing on what are essentially pure business improvements, like the infusion of capital and efficiency gains, you can simultaneously create the breathing room and infrastructure needed to address long-term transparency issues.
Fashion Revolution Week isn’t just a time to reflect on ethics and social responsibility. It’s a sign of a growing consumer frustration with the lack of information about how their favorite brands operate. Established fashion companies who don’t want to lose their customers to supply-chain-focused upstarts like Everlane will have to prioritize supply chain transparency a critical business goal. The good news is, there are some definitive places everyone can start.