May 17, 2020

New research reveals risks of slavery in fashion supply chains

fashion week
Fashion
Supply Chain
Slavery
Dale Benton
4 min
New research reveals risks of slavery in fashion supply chains
London Fashion Weekstartsthis Fridayin the UK but its not just the clothes that will be under the spotlight, research has revealed close scrutiny of the...

London Fashion Week starts this Friday in the UK but it’s not just the clothes that will be under the spotlight, research has revealed close scrutiny of the ethics and supply chain of an industry marred by modern slavery allegations.

Bangladesh and India, where respectively 8.8 percent and 6.6 percent of annual clothing imports to the UK originate, are rated as ‘severe’ risk source countries for modern day slavery, according to BSI’s Index. In total, 60.2 percent (or £10.08bn) of all clothing imported into the UK is from Asia and Oceania.

The second-highest value of imported clothing entering the UK comes from other EU countries, accounting for just over a quarter (25.2 percent) of the total. The majority clothing imported from the EU was sourced from Italy, Germany and France, accounting for £853.5m, £560.2m and £482.8m, respectively. Of those nations, Italy is identified as a ‘high risk’ sourcing country by the Index.

BSI’s Trafficking & Supply Chain Slavery Patterns Index has been developed to assist companies, and, for example, police authorities in several ways. For example, a company that employs agency workers may wish to pay closer attention to workers from a high-risk country – forced labour often takes place in open sight, not only behind closed doors or in secret, both overseas and in the UK.

The Index’s lead developer, Michiko Shima, BSI Supply Chain Services and Solutions, said: “The Index is unique in cross-referencing source countries of migrant workers, and their likelihood of being exploited in destination countries. It is a new way for businesses and organizations to assess and avoid the risks posed by slavery and trafficking. The UK’s import of clothing are coming not only from Asia, where domestic slavery and trafficking is taking place, but also from other EU countries.”

The Modern Slavery Act 2015 (MSA) is bringing the issue of modern slavery and human trafficking to the attention of British businesses and civil society. Its Section 54 clause, Transparency in Supply Chains (TISC), highlights the risk to business of finding examples of it in global supply chains. Several high-profile court cases have highlighted the illegal practices taking place across Britain.

Paul Broadbent is chief executive of the Gangmasters Licensing Authority (GLA), the agency tasked with protecting workers from exploitation. He welcomed the BSI’s data.

He said: “The index is extremely useful and further adds weight to the growing intelligence picture we are building around the scale of forced labour and modern slavery. It is something which affects millions around the world but what is now increasingly prevalent, is how much of it is linked to the UK economy, whether that be at home or abroad.”

Later this year the GLA will be given greater powers and a broader remit to both investigate and enforce labour exploitation and modern slavery. The UK’s 4.8m wholesale and retail workers will fall under its scope.

Mr Broadbent said: “Enslaving people, forcing them to work for little or no reward while under threat of physical and emotional coercion and control, is abhorrent and will not be tolerated. The GLA, working in partnership with the police and other agencies, is absolutely determined to root it out.

“Individuals and businesses involved in the forced labour of workers, whether that be in the UK or overseas, will be held accountable. I urge all companies and retailers to ensure their labour practices meet current regulations and to be as rigorous as possible in checking the practices of their suppliers.  

BSI’s unique Trafficking & Supply Chain Slavery Patterns Index shines a critical light for business, government, and civil society to understand the risk associated with the movement and exploitation of people between 191 source countries and 193 destination countries. Each combination of countries has been ranked from low to severe based on the risk algorithm developed by BSI.

The presentation of tens of thousands of pairings of source/destination countries and their relative risk provides a broad understanding of the breadth of threats to global supply chains. These include human rights abuses, security threats and business continuity risks.

The Index’s inputs include BSI’s proprietary SCREEN Forced Labor Intelligence along with independent trafficking and exploitation data, economic disparity, and countries’ geographical proximity information. The data has been verified against the citations made by credible sources to provide a holistic understanding of the probability of these types of abuses, threats and risks as well as real-world documented cases.

Chris McCann, Principal Consultant, Supply Chain Services and Solutions at BSI, said: “There’s an increased likelihood of modern slavery and forced labour being found in the fashion and apparel sectors’ supply chains. The Index, along with BSI’s risk management services and solutions, empowers organizations to focus their efforts on identifying and assessing ‘at-risk’ suppliers and to manage the risks proactively to safeguard their workforce and protect their own reputation.”

For further information about the BSI Trafficking & Supply Chain Slavery Patterns Index, please visit the website.

 

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Jun 11, 2021

NTT DATA Services, Remodelling Supply Chains for Resilience

NTTDATA
supplychain
Supplychainriskmanagement
Procurement
6 min
Joey Dean, Managing Director of healthcare consulting at NTT DATA Services, shares remodelling strategies for more resilient supply chains

Joey Dean, the man with the coolest name ever and Managing Director in the healthcare consulting practice for NTT DATA and is focused on delivering workplace transformation and enabling the future workforce for healthcare providers. Dean also leads client innovation programs to enhance service delivery and business outcomes for clients.

The pandemic has shifted priorities and created opportunities to do things differently, and companies are now looking to build more resilient supply chains, none needed more urgently than those within the healthcare system. Dean shares with us how he feels they can get there.

A Multi-Vendor Sourcing Approach

“Healthcare systems cannot afford delays in the supply chain when there are lives at stake. Healthcare procurement teams are looking at multi-vendor sourcing strategies, stockpiling more inventory, and ways to use data and AI to have a predictive view into the future and drive greater efficiency.

“The priority should be to shore up procurement channels and re-evaluate inventory management norms, i.e. stockpiling for assurance. Health systems should take the opportunity to renegotiate with their current vendors and broaden the supplier channel. Through those efforts, work with suppliers that have greater geographic diversity and transparency around manufacturing data, process, and continuity plans,” says Dean.

But here ensues the never-ending battle of domestic vs global supply chains. As I see it, domestic sourcing limits the high-risk exposure related to offshore sourcing— Canada’s issue with importing the vaccine is a good example of that. So, of course, I had to ask, for lifesaving products, is building domestic capabilities an option that is being considered?

“Domestic supply chains are sparse or have a high dependence on overseas centres for parts and raw materials. There are measures being discussed from a legislative perspective to drive more domestic sourcing, and there will need to be a concerted effort by Western countries through a mix of investments and financial incentives,” Dean explains.

Wielding Big Tech for Better Outcomes

So, that’s a long way off. In the meantime, leveraging technology is another way to mitigate the risks that lie within global supply chains while decreasing costs and improving quality. Dean expands on the potential of blockchain and AI in the industry

“Blockchain is particularly interesting in creating more transparency and visibility across all supply chain activities. Organisations can create a decentralised record of all transactions to track assets from production to delivery or use by end-user. This increased supply chain transparency provides more visibility to both buyers and suppliers to resolve disputes and build more trusting relationships. Another benefit is that the validation of data is more efficient to prioritise time on the delivery of goods and services to reduce cost and improve quality. 

“Artificial Intelligence and Machine Learning (AI/ML) is another area where there’s incredible value in processing massive amounts of data to aggregate and normalise the data to produce proactive recommendations on actions to improve the speed and cost-efficiency of the supply chain.”

Evolving Procurement Models 

From asking more of suppliers to beefing up stocks, Dean believes procurement models should be remodelled to favour resilience, mitigate risk and ensure the needs of the customer are kept in view. 

“The bottom line is that healthcare systems are expecting more from their suppliers. While transactional approaches focused solely on price and transactions have been the norm, collaborative relationships, where the buyer and supplier establish mutual objectives and outcomes, drives a trusting and transparent relationship. Healthcare systems are also looking to multi-vendor strategies to mitigate risk, so it is imperative for suppliers to stand out and embrace evolving procurement models.

“Healthcare systems are looking at partners that can establish domestic centres for supplies to mitigate the risks of having ‘all of their eggs’ in overseas locations. Suppliers should look to perform a strategic evaluation review that includes a distribution network analysis and distribution footprint review to understand cost, service, flexibility, and risks. Included in that strategy should be a “voice of the customer” assessment to understand current pain points and needs of customers.”

“Healthcare supply chain leaders are re-evaluating the Just In Time (JIT) model with supplies delivered on a regular basis. The approach does not require an investment in infrastructure but leaves organisations open to risk of disruption. Having domestic centres and warehousing from suppliers gives healthcare systems the ability to have inventory on hand without having to invest in their own infrastructure. Also, in the spirit of transparency, having predictive views into inventory levels can help enable better decision making from both sides.”

But, again, I had to ask, what about the risks and associated costs that come with higher inventory levels, such as expired product if there isn’t fast enough turnover, tying up cash flow, warehousing and inventory management costs?

“In the current supply chain environment, it is advisable for buyers to carry an in-house inventory on a just-in-time basis, while suppliers take a just-in-case approach, preserving capacity for surges, retaining safety stock, and building rapid replenishment channels for restock. But the risk of expired product is very real. This could be curbed with better data intelligence and improved technology that could forecast surges and predictively automate future supply needs. In this way, ordering would be more data-driven and rationalised to align with anticipated surges. Further adoption of data and intelligence and will be crucial for modernised buying in the new normal.

The Challenges

These are tough tasks, so I asked Dean to speak to some of the challenges. Luckily, he’s a patient guy with a lot to say.

On managing stakeholders and ensuring alignment on priorities and objectives, Dean says, “In order for managing stakeholders to stay aligned on priorities, they’ll need more transparency and collaborative win-win business relationships in which both healthcare systems and medical device manufacturers are equally committed to each other’s success. On the healthcare side, they need to understand where parts and products are manufactured to perform more predictive data and analytics for forecasting and planning efforts. And the manufacturers should offer more data transparency which will result in better planning and forecasting to navigate the ebbs and flows and enable better decision-making by healthcare systems.

Due to the sensitive nature of the information being requested, the effort to increase visibility is typically met with a lot of reluctance and push back. Dean essentially puts the onus back on suppliers to get with the times. “Traditionally, the relationships between buyers and suppliers are transactional, based only on the transaction between the two parties: what is the supplier providing, at what cost, and for what length of time. The relationship begins and ends there. The tide is shifting, and buyers expect more from their suppliers, especially given what the pandemic exposed around the fragility of the supply chain. The suppliers that get ahead of this will not only reap the benefits of improved relationships, but they will be able to take action on insights derived from greater visibility to manage risks more effectively.”

He offers a final tip. “A first step in enabling a supply chain data exchange is to make sure partners and buyers are aware of the conditions throughout the supply chain based on real-time data to enable predictive views into delays and disruptions. With well understand data sets, both parties can respond more effectively and work together when disruptions occur.”

As for where supply chain is heading, Dean says, “Moving forward, we’ll continue to see a shift toward Robotic Process Automation (RPA), Artificial Intelligence (AI), and advanced analytics to optimise the supply chain. The pandemic, as it has done in many other industries, will accelerate the move to digital, with the benefits of improving efficiency, visibility, and error rate. AI can consume enormous amounts of data to drive real-time pattern detection and mitigate risk from global disruptive events.”

 

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