The dust has barely settled, literally, on the ruins of the garment factory outside of Dhaka, Bangladesh, that collapsed because of poor construction and killed over 1,000 workers and we now have several different “solutions” to the problem of supplier workplace safety being offered by major retailers:
A group of mainly European retailers, along with a couple of U.S. retailers, have signed onto a legally binding pact under which building safety training and inspections will be centrally managed and beefed up
A group of U.S. retailers, together with some industry associations, has just announced the formation of a working group under the auspices of the Bipartisan Policy Center
Other retailers, like Japan’s Fast Retailing Co. (the Uniqlo brand), H + M and others, have decided to each go their own way and deepen their engagement with suppliers on this issue. Some of these were frightened off from signing the pact because they felt its legally-binding nature could expose them to lawsuits.
Some customers may still opt to de-select suppliers who violate codes of conduct.
From the point of view of the retailers, the different approaches make some sense. Each retailer has a unique culture, a unique understanding and view of the issue and a unique capacity to create and implement solutions to a fairly intractable problem. So they have to craft a solution that makes them feel “comfortable.” From the point of view of the suppliers, however, it’s a mess. Companies in the garment supply chain are perpetually squeezed by customer demands around price, quality and delivery. Recently, they’ve also had to respond to multiple unfunded mandates about environmental issues in their businesses. Now, they have to manage multiple approaches to the safety issue in an environment that has little capacity (infrastructure, funding, knowledge, cultural focus) to make swift and lasting change. That’s a lot to do when you’re selling a T-shirt at retail at $6.99.
We favor a collaborative, industry-based approach, although we acknowledge that it entails negotiation and consensus … which can delay implementation of solutions even when urgency is paramount. We think it certainly trumps de-selection (which leaves the problem unsolved) and edges out single-company solutions (which create duplicity and, often, supplier confusion and fatigue). There are a couple of provisos, however:
The collaborators must remained focused on the goal – improving workplace safety in at-risk suppliers – which means they must create a vision of success, agree upon strategies, implement, assess results and build continuous improvement into the solution model
Sufficient funding must be built into the supply model – somewhere – to enable the short-, medium- and long-term activities that are part of the solution.
The collaborators need to view and treat suppliers as partners, seeking a win-win solution
The biggest impediment may be the funding issue, although money isn’t the only challenge. Every stakeholder in the value chain has to pony up to fund this activity and that’s a tall order in “value-driven” supply chains such as the $6.99 T shirt. It would be nice to be comfortable saying “we’ll have to wait and see,” but time is of the essence here.