May 20, 2021

Boohoo exec bonuses linked to supply chain improvement

Supplychain
ESG
riskmanagement
Retail
3 min
A £150m bonus pot tied to business performance will now also be linked to improving conditions in beleaguered fashion group’s supply chain

Fashion group Boohoo has moved to tie executive bonus payouts to demonstrable improvements in working conditions and other ESG commitments throughout its supply chain..

The company this week followed advice from members of its Environmental Audit Committee that the £150m bonus pot, implemented last year and contingent upon business performance, should also be linked to sustainability initiatives and broader supply chain improvements. 

The financial incentive plan was implemented by the company last year, with senior leadership, including co-founders Carol Kane and Mahmud Kamani, set to receive major pay days if the business increases its valuation by around two thirds by 2023. Boohoo floated in 2014 and was valued at around £4.5bn in June 2020, when the incentive scheme was implemented. 

The UK-based online fashion retailer owns and operates brands including its menswear offshoot BoohooMan, Karen Millen, PrettyLittleThing and former Arcadia Group brands such as Burton and Oasis. Last summer it was beset by allegations of poor working conditions in factories in UK cities and underpayment of staff. Workers were reportedly expected to work long shifts for below minimum wage, the ensuing furore of which wiped around £1bn from its share price. 

In response to the reports, Boohoo submitted to an on-going audit and subsequently cut ties with more than 400 suppliers to date. But earlier this year, further pressure from workers’ rights campaigners sparked a fresh inquiry into ‘slave labour’ allegations which may result in an import ban in the United States. 

“Doing more for our suppliers”
 

Earlier this month Boohoo published its first sustainability report, called Up.Front Fashion Ready for the Future, in which it pledged to “doing more for our suppliers” as a key objective, focussing on transparency and greater oversight throughout the value chain. 

Its action plan centres around three key areas of improvement:

  • Clothes made smarter: Making our clothes in a smarter way - with better materials, more sustainable design and less waste and packaging.
  • Suppliers on better terms: Doing more for our suppliers - transparent supply chains, improved standards and management and a long-term commitment to those that work in fashion.
  • Our business taking action: Running our business responsibly - strong governence, a great place to work, tackling climate change, responsible marketing and a role in communities we can all be proud of.

“It’s vital we can trust that suppliers are respecting our ethical, environmental and product quality standards. In particular, we want them to treat workers well and pay them fairly,” the report says. “And to build stakeholder confidence and brand loyalty, we need to communicate our progress clearly and openly. That’s why transparency runs through all our Up.Front goals.” 

The retailer has also committed to publishing a list of its suppliers, making public its purchasing practices, and increasing oversight in supplier management and accountability. 

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Jun 13, 2021

Engineering skills gap challenges UK electric vehicle market

electricvehicles
SkillsGap
Sustainability
HexagonManufacturing
Yvonne Paige-Stimson, Global P...
5 min
Yvonne Paige-Stimson, Global Projects Director at Hexagon Manufacturing Intelligence on how the engineering skills gap is challenging the UK’s EV market

Original equipment manufacturers (OEMs) are hurrying to design and develop electric vehicles to meet the evolving regulatory deadlines. The race to do so while meeting the high consumer expectations for new products is an immense challenge – exacerbated by a shortage of key engineering skills in many national workforces.

The emergence of new engineering skillsets and capabilities needed for new automotive product introduction risks hindering the move to electrification. If unresolved this could result in failure to meet their fleet CO2 targets set for the coming decade – including the ban of all petrol and diesel car sales in the UK by 2030.

The technological transformation of cars into computers – powered by electric batteries – has created demand for a parallel transformation of the automotive engineering workforce, and a pressing requirement for new skills in software and battery engineering.

The skills of the moment

There is a huge and growing need for tech talent. In the UK alone, programming and software development jobs are growing 7.3% on average every year, and these tech roles are amongst the most in-demand jobs. Design and development engineers from either the mechanical or electronic domain, who can also programme, are the new trend. The car of the future relies heavily on programming languages such as SQL, Java, C++, and Python for development of their embedded systems and tools used in their validation. The most highly sought-after talents are those individuals who have blended to become a multi-disciplined hybrid of several specialities. 

Manufacturing also demands IT skills due to the digital transformation of the production and supply chain environments. It is now heavily reliant on Edge machine-level data processing, with cloud integration of shop-floor assets (such as robots, measurement, optical recognition, machining centres etc) all connected together with visualisation and big-data analytics. Availability of Artificial Intelligence and Machine Learning expertise becomes a limiting factor to organisations seeking to make real-time cloud-managed decisions governing quality control, predictive performance and optimise asset utilisation.

The trend to Model-Based System Engineering methods is a significant benefit to product development cost and time to market. Recruiting sufficient Computational Analysis Engineers (CAE) for system dynamics, fluids, structures and acoustics, fatigue and forming technologies, is a challenge. Computational fluid dynamics (CFD) engineers, in particular, have an essential role in EV development: to evaluate the thermal strategy for the battery architecture and integrated cooling systems, with the mission of keeping the car functionally safe and reliable in all conditions.

Closing the gap

The top drivers of the skills gap reported by employers include strong competition for skilled candidates, a shortage of applicants with appropriate qualifications, and a lack of awareness among young people of the educational routes into engineering occupations. The development goal and long-term solution is obvious: to get more people into studying engineering and widen the diversity of this talent pool. Recent UK Government initiatives are already showing some positive impact on this challenge:

  • Significant changes in GCSEs with promotion of single-science options has led to a 17.3% increase in take-up rate of Physics
  • A-level entries are on the rise for most STEM subjects – take-up of A-level Mathematics continues to be particularly high, making up 12.0% of all entries
  • High proportions of international students, especially from India and China, are studying engineering and technology in the UK, particularly at taught and research postgraduate levels (67.7% and 59.3% of entrants respectively). 

Universities are adapting to supply the future talent for the electrified automotive industry, many now offering combined degrees in mechanical and electrical engineering with dual accreditation. Degrees in Controls and Systems engineering are also gaining in popularity, teaching future engineers to work on holistic problems where there are conflicting needs and complex interactions. Given the time it takes to train a new engineer and for them to become effective in the workplace, the sector is therefore challenged to wait for this influx and mobilisation of in-demand skills to be realised.

Instead, focus turns to being ‘employer of choice’, and companies aim to attract the highest calibre new hires to staff their teams. Despite the distraction to business continuity due to COVID-19, there is no time for complacency regarding the employee culture. The most highly skilled (especially in ADAS, functional safety, system controls, CFD, electromagnetic and power electronics) can literally cherry-pick their next employer with ease, aided by the transparency of website platforms like GlassDoor and LinkedIn. 

Partnering on development

Onboarding of software and tools can significantly help alleviate the engineering skills gap – by embedding know-how, others have developed into their digital multi-physics offerings. Engineers can be assisted in getting the workflows and design rules right, creating an immediate and tactical solution to ease the product development challenges.

We can also seek collaborations and technology partnerships by working with specialist service partners locally and globally in a new ecosystem. The ability to achieve the leap to develop IP, leverage experienced resources for global teams, and offload the risks associated with finding and training the skilled engineers in-house – often gives the best of both worlds.

The unprecedented pressure on the world of engineering to develop new EV models will require collaboration on a new scale. While many countries are pushing to grow and diversify the engineering workforce, the skills gap needs to be closed now to avoid disruptive delays for the global market. As a central part of the evolution to e-mobility for our customers, the urgency of this task is starkly clear, and encouraging novel partnerships to close the skills gap will be vital to ensure our industry meets this historic goal.

 

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