Comment: Communication and collaboration key to tackling supply chain slavery
The practice of slavery is, in theory, confined to the history books. Yet it still exists in the modern world, in a more clandestine form, throughout the supply chains of many businesses whose products we buy and use every day. The most recent Zara incident where alleged unpaid workers in Turkey were stitching pleas for help into clothes further ignites the need for more effective mechanisms to address labour conditions and regulate the landscape. The good news is that earlier this month, the International Development Secretary announced that the UK government will spend £40 million on tackling modern slavery in supply chains, with retail giants like Ikea, Tesco, John Lewis and Marks & Spencer taking part in the research.
Despite this, studies still reveal that the world is failing to meet the UN’s Sustainable Development Goals, furthering the ongoing concern of how ethical our supply chains truly are. The research, conducted by International Labour Organisation and the Walk Free Foundation, found that over 40 million people worldwide are victims of modern day slavery, and that 152 million children, between 5 and 17 years old, are in child labour.
Often a company’s boardroom and the factory handling its production are continents away from each other. The physical distance between them is widened by a distance that comes as a result of limited communication and a lack of awareness of how certain practices are handled locally. Practices like falsified factory audits and outsourced production contribute to modern slavery across companies’ supply chains. The lack of training and education across all levels can further harm a business’ ethical initiatives.
Despite the seemingly growing number of companies introducing their own fair-trading schemes and standards for ethical sourcing, it’s clear that the vast majority are still failing to do their bit.
With increased access to information and shared content online, conscious and socially aware consumers are demanding greater transparency from brands and their supply chains. Apps like Not My Style and Project Just, along with social enterprises like Fashion Revolution, are putting increasing pressure on the fashion industry’s supply chain ethics. Not My Style lets users browse through and rate brands based on how much information they have disclosed about the factory workers and labour conditions in their supply chains. Consequently, ASOS’ entire supply base has been revealed through this rating app, as opposed to FCUK’s, who refused to share any data. Project Just works in a similar way, rating brands on how they report human rights and environmental issues, and supplying browsers with a guide to which ethical brands they can shop from. The snowballing consumer activism is putting pressure on retailers to first question their own supply chain ethics, and then consider what they could do to address any existing issues.
We need to talk
In today’s connected age of tech and social media, it seems we’ve forgotten how to truly communicate. The sheer act of talking and facilitating these discussions could be the key to eradicating slavery in the modern world.
Factory workers often hold back from voicing their grievances, fearing that their statements might be met by unjust retribution. It is in the hands of factories to enable trustworthy and effective methods for sharing concerns and complaints. Product design and procurement specialist, Matrix, worked with high street retailers and NGOs to launch MatrixChat; a new worker welfare service, via the Chinese messenger app WeChat. MatrixChat is set to change the consumer goods industries for the better, as it allows factory staff to log quality of work-life statistics so that factory managers, intermediaries and buyers can focus on improving the working lives of their employees.
Another way to facilitate the honest sharing of grievances is to supply workers with a mobile hotline and online surveys, which can additionally provide a direct route for worker voice all the way from the factory floor to the brand’s headquarters. Of course, the mechanics of these processes would also need to be considered. Matrix, for example, helped to install a wireless internet connection in its core factories’ communal areas, so that people could access the MatrixChat service without incurring costs from their mobile providers.
These examples illustrate necessary, cheap and simple steps toward bridging the gap between brands and the people making their goods, and will help to combat the problem of often falsified factory audits. What could also have a significant impact on eliminating unfair working conditions is if businesses committed to going the extra mile and to making irregular visits to their suppliers, in order to check working conditions throughout the year and not just around factory audits. These are small but effective steps in opening up the channels of trustworthy communication in the supply chain.
When the tools to talk are there, how can businesses truly embed ethical initiatives in their corporate cultures and therefore prolong their lifespan?
Educating and training everyone, from retail buyers to factory managers and workers, in CSR is essential. Online platforms can supply access to information about core processes, such as regulation changes and the lifecycles of the products that workers have helped create. Partnering with local institutions and NGOs in supporting migrant workers to settle in, introducing programmes for working parents, as well as providing training on quality management and leadership are additional steps that companies should take in order to inspire culture and boost the productivity of a happy and stable workforce. All stakeholders need to have a clear overarching vision and understanding of the importance of such initiatives and their possible effect.
Theoretically, all businesses should exercise due diligence in their supply chains, but when that has been foregone, raising awareness of an issue and its importance must be a starting point. Collaboration and communication, intertwined with innovation and technology, could be key to adopting responsible business practices and processes. The outcome of these would positively impact a business’ supply chain, eliminating the risk of modern slavery incidences. Maybe someday modern slavery could be just a page in a history textbook.
5 Minutes With: Jim Bureau, CEO Jaggaer
What is data analytics, and why is it important for organisations to utilise?
Data analytics is the process of collecting, cleansing, transforming and analysing an organisation’s information to identify trends and extract meaningful insights to solve problems.
The main benefit for procurement teams that adopt analytics is that they’re equipped to make faster, more proactive and effective decisions. Spend analysis and other advanced statistical analyses eliminate the guesswork and reactivity common with spreadsheets and other manual approaches and drive greater efficiency and value.
As procurement continues to play a central role in organisational success, adopting analytics is critical for improving operations, meeting and achieving key performance indicators, reducing staff burnout, gaining valuable market intelligence and protecting the bottom line.
How can organisations use procurement analytics to benefit their operations?
Teams can leverage data analytics to tangibly improve performance across all procurement activities - identifying new savings opportunities, getting a consolidated view of spend, understanding the right time for contract re-negotiations, and which suppliers to tap when prioritising and segmenting suppliers, assessing and addressing supply chain risk and more.
Procurement can ultimately create a more comprehensive sourcing process that invites more suppliers to the table and gets even more granular about cost drivers and other criteria.
"The main benefit for procurement teams that adopt analytics is that they’re equipped to make faster, more proactive and effective decisions"
Procurement analytics can provide critical insight for spend management, category management, supplier contracts and negotiations, strategic sourcing, spend forecasting and more. Unilever, for example, used actionable insight from spend analysis to optimise spending, sourcing, and contract negotiations for an especially unpredictable industry such as transport and logistics.
Whether a team needs to figure out ways to retain cash, further diversify its supply base, or deliver value on sustainability, innovation or diversity initiatives, analytics can help procurement deliver on organisational needs.
How is data analytics used in supply chain and procurement?
Data analytics encompasses descriptive, diagnostic, predictive and prescriptive data.
Descriptive shows what’s happened in the past, while diagnostic analytics surface answers to ‘why’ those previous events happened.
This clear view into procurement operations and trends lays the groundwork for predictive analytics, which forecasts future events, and prescriptive analytics, which recommends the best actions for teams to take based on those predictions.
Teams can leverage all four types of analytics to gain visibility across the supply chain and identify optimisation and value generating opportunities.
Take on-time delivery (OTD) as an example. Predictive analytics are identifying the probability of whether an order will be delivered on time even before its placed, based on previous events. Combined with recommendation engines that suggest improvement actions, the analytics enable teams to proactively mitigate risk of late deliveries, such as through spreading an order over a second or third source of supply.
Advanced analytics is a research and development focus for JAGGAER, and we expect procurement’s ability to leverage AI to become even stronger and more impactful.