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by: Russ Jowell (firstname.lastname@example.org)
Before we continue, I'd like for you to consider the picture at the top of this post. It depicts two very different paths right next to each other; one that is smooth, clear, and well-paved and another that is dark, uneven, and a little vague as to its destination. Now consider this question: if making your living depended on making your way down and back on one of these paths each day, which would you prefer? The flat, wide, evenly-paved, tried and true path? Or the uneven, unpaved, narrow path with obstructions in the way? Unless you consider yourself to be an extreme wilderness adventurer, I think that most of you would choose the friendly and dependable path on the left as opposed to the rugged and undependable path on the right. What does all of this have to do with garment sourcing and social compliance? Well imagine for a moment that you are a major apparel brand seeking a supply chain (read: wooded path or rural road) to produce your latest new style and you find yourself considering production facilities in two different countries. Which are you going to choose, the one with a reliable, dependable reputation that will allow you to conduct your business smoothly and securely, or the one a little less certain that will make business a little harder? A buyer with even the slightest ounce of modern business savvy will undoubtedly choose the first of these two options by virtue of the fact that it is the most efficient and reliable path to sales and profits, which of course is a basic principle of every business whether it is selling furniture, fashion, or fishing boats. Okay okay, I'll admit that if you are a buyer or brand reading this you probably don't need an entire blog post reiterating the fundamental business principle that people in the 21st century are starting to care more about where their goods come from, and by extension so should you. Instead, let's look at this from the perspective of the paths themselves and those responsible for their maintenance (i.e. the factories and their home countries). While many sourcing countries have done a good job of keeping their supply chain "paths" well-groomed and free of obstacles, others (including some of the world's top sourcing destinations) have let maintenance of their paths lag, resulting in weeds and overgrowth crowding the way and making these "paths" at risk of becoming less welcoming to brands and buyers. So what do these "weeds" and "overgrowth" look like in the context of apparel sourcing? Let's look at some of the recent events that have transpired in Bangladesh for an answer. In the wake of ever-increasing production costs in China over the past two decades, Bangladesh has managed to carve a very lucrative supply chain "path" for itself by gaining a steady reputation as the sourcing destination of choice for many of the world's fashion brands and buyers by virtue of affordable wages and abundant labor, among other things. As more and more suppliers began to traverse this path and start making their purchases from Bangladesh, the export-oriented garment industry grew to become an integral part of the country's overall economy, accounting for the vast majority of export income and a large percentage of employment. Many garment factory owners also became blinded by gold-tinted glasses during this time, seeing a virtually infinite stream of revenue and potential profits through the manufacture and export of these products. Thus, they began to lure more and more people down the Bangladesh sourcing path by taking on more orders than they could realistically handle and by stretching their work forces almost to the point of breaking.
So what happens when more and more people start using a trail? It gets worn down of course. As you see in the photo above, increased traffic results in increased wear on the trail itself. Muddy areas start to form, footprints turn to puddles, and what was once a pleasant walk through the woods has become...not so pleasant. Even the most well-conceived trails need regular maintenance to keep them usable. The same can be said about social compliance. While many of Bangladesh's factory owners were busy luring more and more fashion buyers down their path, many of them let maintenance of that very path fall by the wayside. As factories were busy cutting stack after stack of raw cloth for tee shirts, they neglected to see the growing fire hazard caused by the growing stack of cloth trimmings on the floor. As they were hastily drafting contracts with the likes of Nike and New Balance, they neglected to draft effective fire evacuation plans. And as profit-hungry entrepreneurs were busy moving hundreds of workers and sewing stations into spaces insufficient to support such operations, they neglected to see the crumbling walls and sagging floors that could not take the weight. Unfortunately, the bubble has now burst. Ha-Meem, Tazreen, Smart Garments, and Rana Plaza; all of these names stand to represent the tragic consequences of an ill-maintained sourcing path, though I could easily add dozens of other names to that list. Social compliance is fundamental to a successful supply chain, period. It is not merely a public relations strategy to better the image of your company, nor is it something you consider simply as part of the "green movement." Not only is social compliance an essential component to successful business, it is increasingly being used as a competitive tool. It is always commendable for a factory to establish compliant practices, but there is something to be said about social compliance longevity. Several countries like India and Pakistan have caught on to this concept in recent months. So what does compliance longevity look like? In the United States, numerous industrial operations, like factories, maintain posters of some kind that indicate how many days have passed since the last workplace accident occurred. Obviously, the bosses want this number to be as high as possible because it is outward proof that they can consistently conduct business in a safe manner, or in other words, they have a well-maintained, high use path. The same can be said about social compliance. WRAP's Certification Program is divided into three levels: Silver, Gold, and Platinum. All of our first time factories will enter the program at either the Silver or Gold level, depending on the findings of their initial audit. While we commend all factories that achieve a WRAP Certification, I want to take a minute to talk about our Platinum certification. We would love for every factory in our program to aim for a Platinum certification. With that said, it is not an easy goal to reach. Unlike the other two levels, first-time factories cannot enter the WRAP program at the Platinum level. In fact, a factory cannot even be considered for Platinum certification until it has maintained a Gold certification for at least 3 consecutive years. Additionally, once a factory receives a Platinum certificate, it must consistently maintain it to remain Platinum-eligible. In other words, if for whatever reason a Platinum-level factory drops out of the WRAP program and decides to re-enter, they cannot do so at the Platinum level. A Platinum factory must keep it's compliant day-count as high as it can be. So what does it mean to be Platinum-certified? It means that compliance is second nature to that facility. It proves that the factory knows how to consistently push out volumes of goods in a safe, reliable, and ethical manner, because they've been doing it for at long time (at least 3 years). It means they have a perpetual habit of reliability and trustworthiness. In other words, even though their sourcing paths may be heavily used, they have mastered the art of keeping them well maintained and making them more appealing for buyers and brands. The bottom line is that while social compliance should be seen as an essential element of successful business practice, it is not antithetical to successful business practice. As we have mentioned in prior posts on this blog, compliance by default is not an expensive proposition, and if implemented and maintained properly, is not cumbersome. But it does require regular attention to details and consideration from all parties involved to ensure that the path to success for both factories and buyers is a smooth one.