Consumers in developed world have high expectations from the apparel brands they buy. They expect the clothes to not have been made in inhuman and unsustainable conditions like sweat shops, or use child labor, labour is not being squeezed to do more number of hours or being under paid. Often, manufacturers in underdeveloped countries in order to get more business don’t take proper care of human resource or apply appropriate safety measures. Meanwhile, brands are facing pressures from various consumer groups to take compliance code of conduct seriously, check all details of their supplier units and factories, highlighting the need for transparency in their supply chain.

In the just concluded PSF 2016, a panel discussion on brands and in turn manufacturers was the spotlight. It talked about the need for transparency in supply chain and risks arising from there in. The panel deliberated that better communications and collaborations can help mitigate mutual risks and provide competitive advantage for both the parties, brands and suppliers. The panel also explored how companies are evolving their communication activities to handle this ‘new normal’ and what opportunities this represents.

Obviously transparency in supply chain could expose brands to a lot of risks, if their suppliers are not compliant. Rolling out the discussion, Laura Tyson, SVP, Fleishman Hillard, said she has been working in Hong Kong in communication and media, with a focus on supply chains, “Brands with supply chain focus keep coming back asking us, could we help them communicate, keeping their brand reputation intact, as this is becoming a basic need for brands to know how their supply chain is working?”

Alessandra Cocchi, MD, East Max Fashion, sharing her experience with high fashion brands, “We are increasingly facing the situation where consumer expectations are going up, they would expect to know the origin of our products. We face a lot of pressure to raise our level of manufacturing in terms of compliance, to know if we are fighting potential problems related to environment, maintaining and improving efficiency, without increasing prices etc.” Hence, more transparency is required at supply chain levels.

Alex Thomas, VP, Manufacturing Excellence and Technical Services, VF Asia pointed out that if we are not aware and proactive as an industry then government and regulators will enforce or NGOs will enforce as safety is aconcern for every country and everyone.

While agreeing to the risk exposure the panel agreed compliant working and communication with consumer could actually open up opportunities, “Opportunities can be seen, as we have been enforced to engage positively with our suppliers. What we have done is, we have started communicating with brands on the format of fair business practices. In the process, information is shared regarding fair profits, though we have to offer our factories a long term partnership,” explained Alessandra. However, this is a gradual process and may take a few years, “But suppliers are happy to work, as they find it suitable, and they can see that the brand is sustainable and offers a long term business.”

Whe said being politically correct, they identify the kind of suppliers, who they can work with and share standard practices and would try to help suppliers getting oriented. “But if one of our supplier doesn’t pass the test in EU, we have to reject that supplier. Today, if certain suppliers don’t pass the test in EU or in the US, irrespective of the supplier understanding, we have to discontinue.”

“According to me, the risk in communication, is first to do with big data that we have,” says Alex Thomas, VP, Manufacturing Excellence and Technical Services, VF Asia, “As we have a lot of information, we assess the data, about factories in our supply chain. Secondly, we at VF Corp have 32 brands, all these brands have different DNAs. We have to act keeping brand promises, on other end of spectrum, we have brand promise with a top retailers like Walmart, where we need to work mainly on productivity and saving cost for the value promise, this we may be doing in factories in Mexico, where there are wages 1.5 times higher than that of any other Asian manufacturing countries. Third aspect is engagement, we put all this information on public forum, not only corporate, but bottom up, right upto consumer level, so we go for a lot of engagement, not only with supply chain partners but with the end consumer.” He said as a brand and manufacturer they understand pressures from media, NGOs so they started with a lot of engagement, and in the last five years, a lot of consolidation has taken place, “we don’t source from unknown suppliers anymore. We work with strategic partners, and with them comes more engagement, everyone is able to see direct impact.”

Coming to consumer engagement, Laura asked the panel what kind of opportunities this brings on the table. Alex pointed out not only at consumer levels but at community levels, brand promise needs to be maintained. Alessandra explained, “We have a scoring system based on the working with the suppliers, brands at high end or others may have a different social system. Synchronization of social system is calibrated for different kind of brands. We may have worked extensively with high end brands, we face challenge to explain to the consumer what that scoring system is all about.” While benefits of consumer engagement that facilitates a better understanding of trends and consumer behaviour, I think there’s huge differentiation in the way consumer looks at origin and quality, for some regular cotton is fine, and for a few three times cost of organic cotton is also fine,”

Andreas Kim, MD, Greater China, Lectra, China, shared a different perspective, “Historically, we in apparel and fashion industry face the need for transparency or communication internally or externally. Growing fast fashion generally needs more suppliers than traditional suppliers, 85 per cent of communication is done on excel sheet, 5 per cent of that is still being done by fax and only 10 per cent is digital communication.” He felt there is a need to come together and that there’s a need to standardise, what we do and what we communicate. “We may follow Higg’s Index or any other process that is considered seriously, through these standardization, we can compare. We necessarily don’t reduce competition because of standardization but increase opportunities. Standardization enables level playing for everyone,” he felt. Today, every brand has its standard process, so every manufacturer has to go through the same process again and again, this is not a consistent way, as for a manufacturer we need lower cost and standardization means lowering the cost, Kim opined. For a brand it is important to have consistency, in terms of price, quality, specification. “I invite all associations to come together to create standardizations in processes. And now through digitalization, it will enable us to be more efficient to achieve standards. Standardization can sure reduce the risk of communication, however you can never be sure that risk is over, risk will always be there, but standardizations will reduce unforeseen risks,” Kim summed up.