As I approach my 10th year in the supply chain monitoring profession, 9 years spent in Asia and now in the United States, it is opportune to pause for reflection and share my thoughts on where the industry has come and, importantly, the steps needed to progress further. It is easy to become jaded. Many challenges, transparency for example, remain as entrenched as ever. However, there have been significant improvements. While market forces have played a part, wages have risen considerably, working hours are not as egregious, health and safety has improved and there have been important collective advances, such as the progress made by the Alliance and Accord, in Bangladesh, where not a single worker death has occurred in the garment sector during 2015 and 2016.
One conversation which continues unabated is that supply chain auditing is unproductive, or even counterproductive, and that the industry needs to move away from this model redirecting resources into tools of sustainable change, capacity building for example. Suppliers then, the notion goes, would be empowered to manage compliance in-house without the need for continuous ‘policing’. I participate in this discussion regularly, first with a client during one of my initial visits to a Chinese supplier to most recently at the BSR Conference, in New York, during November.
My view remains the same. While there is merit to the argument, the reality is, with the exception of a select group of sophisticated suppliers, the industry is not there yet. Regular monitoring shall be required for the foreseeable future. The reasons are nuanced and many. Examples include weak, emperor-style, management structures within factories, ineffective or non-existent unions/worker representative committees and inadequate local institutions within the countries where they operate. These conditions persist creating a vacuum of non-enforcement which the private sector is required to fill. In short, supply chain monitoring is not going away. On the contrary, evidence points towards greater numbers of supplier audits overall with Omega Compliance, for example, performing increasing volumes each year.
This is not to say that it is a perfect system. A rethink is required. While moving away from auditing is unrealistic, more should be done to maximize impact.
Too often responsible sourcing operates in a silo. A one size fits all approach remains prevalent across many organizations where requirements and expectations are unvaried across thousands of suppliers, regardless of commercial relationships or local conditions. Leverage varies across business partners and companies cannot remediate every issue. These attempts to boil the ocean lead to the fatigue so commonplace with the ‘audit model’.
Instead of moving away from audits companies should look to build upon them by prioritizing suppliers to maximize impact. Factories could be weighted by business volume placed, country risk or percentage of production capacity your organization represents. Once these core partners have been segmented, consult with sourcing to determine their viability before driving remediation further. An elevated corrective action plan may be implemented, perhaps, or deeper dive projects could be introduced. Examples include supplier-specific health and safety training programs, empowering both factory management and workers, developed with the local priorities in mind such as fire safety in India or chemical management in Bangladesh apparel suppliers. Market-specific projects can also be introduced; forced labor mitigation in Malaysia or Thailand, for example.
It would be reasonable to argue that the responsible sourcing movement has reached something of a plateau. However, with some critical thinking and bold leadership there is no reason why the next ten years cannot be even more productive than the last.
Now based in New York, Mark is the Director of Business Services for Omega Compliance in the United States represented by Worldwindows, LLC