We believe what happens in a company’s supply chain is an integral aspect in their sustainability and ethical practices. So we thought we’d share some sustainable supply chain advice here with you. The original blog article was published on OneSimpleAsk by Natasha, The PachaMama Project Manager.
When it comes to ensuring sustainability in the supply chain, the challenges the fashion industry face are among the most problematic and complex. A company’s supply chain is like an intricate woven fabric. The further away from the edges you get, the more difficult it is to stop it from fraying.
There is an ongoing argument about the compliance of sustainability initiatives and whether or not they should be made mandatory, but years of research have found that best practice sustainability is achieved through using the carrot, not the stick.
Supply chain management is no different. In fact, the further away the procuring company is from its supplier, the more important it is to implement smarter sustainable procurement initiatives. There is no doubt about the necessity of formal management and sustainability strategies with its audits and checks, but companies are better off to think of supply chain management in terms of partnerships and practice, rather than compliance, through both macro and micro approaches.
As supply chains become more globalised and complex, it inevitably also becomes a risk and reputation management issue. To create long-term sustainable value and positive impacts, sustainable supply chain management therefore has to build capacity and add value.
Although the challenges may be complex, when it comes to the clothing industry, at least, the value-add evidence outweighs the counterarguments. The UN Global Compact identified the following points in the business case for sustainable supply chains:
- Risks are better anticipated and managed
- Reduced operational risks
- ‘Social license to operate’ within communities, and legal systems that otherwise might be antagonistic
- Reduced costs, enhanced efficiency and profitability
- Redued turnover by improved working conditions
- Protected corporate brand, and customer and consumer confidence
- Opportunities in sustainable process and product innovation through empowered suppliers.
The consumer market is becoming less forgiving. It’s a vicious and necessary cycle. Globalisation and climate change have brought issues that once seemed so far off, right to the consumer’s door. As the fight against climate change pushes on, consumers want to know what impacts the products they buy have on the environment.
It doesn’t take a market specialist to understand that reputation directly impacts on profit and sales. As Joe and Jane Buyer become more educated in environmental and social issues that traverse national borders, they put more pressure on companies.
Sustainable supply chain management in the clothing industry is of course full of challenges and trade-offs. But, greater complexity arises when marketplace competition for high quality and low prices leads to cheaper offshore production in developing countries like India, China and Taiwan.
These are central hubs for supply chain issues, where cheap production leads child labour and dangerous working conditions. With a lack strict environmental regulations, large amounts of raw materials, chemicals, water and pollution contribute to the finished product. This lack of sufficient government regulation to enforce environmental and social standards means that MNE’s have greater responsibilities within their ‘spheres of influence’.
There are now several global and regional initiatives to help clothing companies manage their supply chains more sustainably. The Sustainable Apparel Coalition for example, combines metrics and montitoring with partnership and learning to help develop more sustainable supply chains in the clothing industry.
Internally, to start to overcome the massive challenges that clothing companies face in their supply chains, there are a few key point that supply chain managers should bear in mind when looking to develop new supplier relationships:
- Consider the size of the supplier.
- Consider the social and political environment in countries you wish to procure from.
- Be open-minded about alternative materials and sustainable natural fibres.
- Be prepared to invest in training, skills and knowledge, to build supplier capacity rather than simply just purchasing.
Good supply chain management is about your managing your ‘sphere of influence’. It’s about preserving supplier and other stakeholder relationships, mitigating risk, maintaining reputations and most of all value-adding and innovation in identifying opportunities to build capacity and social and environmental awareness.*
The PachaMama Project’s ethical sourcing policy uses these guidelines for a sustainable supply chain. All of our products are sourced either directly from the artisan, or from responsible fair trade certified or ethical coopertives and assocations that work directly with artisans in their communities.