Tragedy Exemplifies Need for Brand Protection against Social Compliance Violations

Posted by Gary M. Barraco on Tue, Nov, 27 2012 @ 11:15 AM

Corporate Social Responsibility and Traceability Tools Essential for Global Sourcing

The terrible news from Bangladesh has focused the world’s attention on garment factories and reminds most in the industry of a similar tragedy in New York City in 1911 at Triangle Shirtwaist Factory. But the reports of the Tazreen Fashions fire that occurred on November 24th outside of Dhaka, Bangladesh leaving more than 110 factory workers dead, highlights the ongoing fire safety issues in that country. According to sources, fires at garment factories in Bangladesh have killed over 600 people in the last six years, including the December 2010 factory fire that resulted in 29 deaths.

These tragedies have triggered a renewed response from supply chain and corporate social compliance managers who have the responsibility of protecting their brand against disruptions and risk from consumer backlash. This factory, which manufactured T-shirts, polo shirts and fleece jackets for major retailers, was riddled with worker safety violations. Even though retail supply chain executives had previously terminated its direct contract with Tazreen Fashions citing “high risk” safety infractions, but orders were still being processed at the factory.

For brands and retailers this caused major ripples that have repercussions throughout the entire supply chain. Every aspect of traceability that stems from proper vendor management and social compliance audits is being tested as brands are scrambling to determine which of their products are manufactured in this factory, region or country. A wide-spread protest has halted production in Bangladesh as workers walked off the jobs in reaction to the lack of oversight.

Basic awareness of these new social accountability regulations is not enough for brands and retailers; they must also initiate the daunting task of monitoring and documenting compliance. Complying with regulations is an important part of protecting the image of the brand name, maintaining consumer satisfaction and steering clear of costly liability claims against the company. Almost every US retailer needs to make important decisions now before issues arise.

Supplier compliance standards are not new to the retail environment. In order to minimize the impact of these supplementary evaluation points, third-party supplier auditors can be contracted to conduct initial audits and monitor supplier conformance.

Collaborative technology solutions are the key to preserving the trust of valued consumers and alleviate risk from litigation. Technology-based solutions, like ecVision Suite®, help companies increase supplier collaboration and visibility, supports greater supplier accountability, and is a conduit for broader, proactive supplier management activities. ecVision Suite® is a cloud-based platform that offers the functionality to fulfill the end-to-end, develop-to-shelf needs of both retailers and suppliers. It is equally important to realize that integration to external and third-party systems can push & pull information into a central repository to increase its value and preserve existing investments.

Using the Supplier Management and Factory Compliance Best Practices within the ecVision Suite®, internal sourcing and compliance teams can work with factories, vendors and outside inspection teams to maintain strict adherence to the numerous performance standards, and subsequently build stronger relationships with each link in the supply chain through the collaboration tools on the platform.

This service is designed to ensure that factories abide with social responsibility (or environmental) standards. It includes workplace code of conduct audits, such as working hours, age requirements, discrimination, living conditions, or other social accountability measurements. As a form of protection, business rules can create alerts or even prevent orders from being sent to non-complying suppliers.
Through integration to supplier inspection providers, ecVision Suite becomes the link for information to flow between these external organizations and compliance managers. Strong reporting tools and scorecards allow users at any level to view performance indicators as a dynamic traceability tool.

Armed with solid information about labor conditions in their supplier network, retailers will find themselves better positioned to monitor and respond to compliance regulations and other laws that may follow.

Topics: Retail, Supplier Management, Supplier Compliance Questionnaires

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