Tag Archives: fast fashion

20400 Reasons The World Needs An International Standard For Sustainable Procurement

ISO20400, otherwise known as the International Standard for Sustainable Procurement, is due to be published this month. Procurious recently interviewed Jean-Louis Haie, sustainable procurement expert, head of the Australian delegation for ISO20400, and guest speaker at the upcoming Women in Procurement 2017 conference in Melbourne.

“We are at a tipping point in terms of the sustainable procurement journey across the globe”, says Jean-Louis Haie. “Organisations spend between 40 per cent and 80 per cent of their revenue on the supply chain, but increasingly recognise that they can’t achieve their sustainability objectives without getting their suppliers to actively contribute.”

“CPOs who are serious about sustainability goals know that around half of those objectives can only be delivered by their suppliers. There’s no such thing as an effective sustainability program without a supply chain component.”

By nature, supply chains are international, which is why having an international standard is vital. “When you’re asking a supplier based in China to align with your business’ or your country’s standards, they simply don’t have the same standards and don’t speak the same language around sustainability. ISO20400 seeks to create a standard that will enable every organisation in the world, regardless of size, industry and location, to have a flexible guidance framework on sustainable procurement.”

Learning from France’s sustainable procurement bible

Jean-Louis says that it depends on the industry and the area of sustainability under discussion, but in general, governments around the world can learn from his home country (France) when it comes to implementing sustainable procurement. Three key milestones took place – in 2006, 2010 and 2012 – that illustrate France’s journey towards a national sustainable procurement standard.

“The first thing I would mention is that France has a National Procurement Code – a “bible” for procurement professionals that’s applied to all public procurement tasks. In 2006 they changed the Code to include some clear objectives and principles around sustainable procurement. This caused a lot of change, as governments, councils, public hospitals, water corporations etc were encouraged to look at environmental and social specifications when making purchasing decisions. The private sector followed to a certain extent. The point is that it’s a national Code, and highly centralised. I now live in Australia, and we don’t really have that here – the federal government, state governments and local councils are all pretty autonomous.”

In 2010, the ObsAR, a National Association for Sustainable Procurement was created in France in reaction to a crying need to share knowledge and experience around this important topic. “It’s a platform for public and private organisations to share lessons learned around sustainable procurement, through working groups, an annual conference, and ongoing discussions.

At the same time, the government started to get involved in making sure the big buying organisations (including private companies) manage their supply relationships with SMEs fairly. It created a Charter for Responsible Supplier Relationships, which described 10 commitments to be respected by signatory organisations. This initiative was a success and thousands of organisations follow its principles now. 2 years later, the Government transformed this Charter into a certification scheme, which was tested on a selection of 30 organisations, including some SMEs, multinational companies and government agencies.”

“The certification program includes fair payment terms, fair contractual clauses, checks on abuse of power, inclusion of social and environmental requirements, and more.”

While France’s sustainability journey is encouraging, Jean-Louis notes that supply chains are international. “These are international companies dealing with an international supply chain in a global economy”, he says. “No matter how rigorous the standards are in one country, the system can’t work unless there’s a similar standard in the country you’re sourcing from – hence the need for an international standard.”

What does ISO20400 include?

The Standard includes seven core subjects, such as the environment, fair operating practices, labour issues and human rights, with a range of subtopics under those, such as discrimination and gender inequality. “It provides the reader with a thorough description of all the potential sustainability issues and risks they may face when they want to put in place a contract and buy something. Then it’s the responsibility of the procurement professional to decide what the hot spots (risks) are for their particular procurement activity, using ISO20400 as a framework. The Standard provides a methodology to set priorities. What it doesn’t do is put more weight on any one subject over another – we’re not telling people that human rights are more important than the environment, for example.”

Bringing procurement and sustainability expertise together

“In my experience, procurement professionals struggle to work with sustainability experts. They should be best friends”, say Jean-Louis. “The trouble is that there’s no framework to enable these two groups of experts to speak the same language and work more effectively together. ISO20400 will provide a framework – or a bridge – to channel the discussion in plain English so they can understand each other.”

“For example, most companies have some sort of sustainable procurement code in place, which puts pressure on suppliers to comply. But they forget that a good many of these sustainability impacts are created by bad procurement practices. Look at the fashion industry, for example – impossible deadlines put pressure on suppliers, which causes them to abandon key guidelines such as working safely and not using child labour”.

Jean-Louis Haie is the founder of Planet Procurement and a guest speaker at Quest’s upcoming Women in Procurement 2017 conference in Melbourne, Australia.

2016 Rewind – Best of eLearning – The True Cost of Supply Chains

For our final 2016 rewind, we’re looking at the year’s top eLearning modules. How can sustainability help limit the true cost of supply chains?

Fast fashion is the embodiment of unsustainable supply chains and consumerism. Why then does it still have such a following? And what can we as consumers do to change this.

Well, we could all start by watching ‘The True Cost‘ – a film documentary that highlights the very worst aspects of fast fashion. It’s an eye-opening, and at times harrowing, look at how consumer trends are impacting the lives of workers in developing countries.

Procurious were delighted to be able to host one of the film’s team, Lucy Siegle, to the Big Ideas Summit this year.

True Cost of Supply Chains

When it comes to Fast Fashion, Lucy is one of the UK’s primary experts. At the Big Ideas Summit, she delivered a message to the assembled procurement leaders – you are in a position to change this.

She believes that there needs to be a more holistic view of the supply chain. This can start with procurement, but needs to include consumers too.

Consumers can help develop sustainable clothing and fashion brands by investing in them. Instead of buying attractively cheap clothing, we need to consider the true cost of the garment. Your cheap t-shirt could be driving poor working conditions in another part of the world.

So what’s procurement’s role in this? Well, as the key stakeholder in ensuring supply chain transparency, procurement can ensure suppliers are adhering to proper procedure. The profession also has the chance to change fast fashion trends by supporting truly ethical suppliers. Only then can we break the cycle.

You can read more about Lucy’s work on the Procurious Blog. You can also catch up with all the thought leadership from the Big Ideas Summit 2016 on the eLearning Hub. And there’s a whole lot more there to keep you interested too! Happy viewing!

The Double Edged Sword for Fast Fashion Brands

The impact of fast fashion can be seen on the high street and in the newspapers. But the trend may be about to take down one of the world’s most recognisable brands.

Gap Brands

There are few people in the world who wouldn’t recognise Gap’s brands on the high street, in shopping malls, or on the Internet. However, the fashion and retail giant is facing up to major issues thanks to the ever-growing fast fashion trends.

With consumers moving their shopping habits away from in-store purchasing, Gap may seek bankruptcy in order to help it transform its business model and organisational set up.

Sinking Sales

All three of Gap’s major brands – Gap, Old Navy and Banana Republic – have seen sales decrease again in the first quarter of 2016. In April 2016, Gap sales dropped by 4 per cent, Old Navy by 10 per cent, and Banana Republic by 7 per cent.

The company is now on a run of 24 straight quarters without a growth in comparable sales, and 13 straight months of declining sales. In the face of this, Gap’s shares are down by 9 per cent since the start of the year, leading many analysts to suggest that these brands still aren’t learning lessons from fast fashion retailers such as H&M, Uniqlo and Zara.

Gap is yet to successfully match the design-to-shelf timelines of fast fashion, with many of its products still taking up to nine months to hit the shops. This is roughly double the length of time that it takes fast fashion trends to reach consumers on average.

Wider Impact

It’s not just Gap who are suffering from the fast fashion spread. Other US-based brands, including J. Crew, Abercrombie & Fitch, have experienced a sales downturn, while traditional retail icons, such as Sears and Macy’s, have both closed a number of stores this year.

In Australia, Wesfarmers Ltd, the country’s biggest company by sales value, announced its worst yearly profit in two years, and looks set for its first net loss in almost 20 years. The organisation puts its decreasing sales down to the impact of fast fashion brands on its in-country discount stores.

Double-Edged Sword

However, not all is rosy in the garden for the fast fashion retailers. Uniqlo appear to be struggling to gain a foothold in the US market, opening fewer stores than anticipated, and with slower than anticipated sales.

Chief Executive, Tadashi Yanai, has gone to the USA to assess the company’s strategy and to work out how to raise the brand’s profile outside of major cities. The company has consistently lost money in its US operations since expanding there five years ago, but still maintains a plan to open over 100 stores in the country in the coming years.

Could this be a turning point for retail brands? Or is it just the natural progression of a business’ rise and fall, just sped up in line with the increasing pace of change in trends and demands? Whichever it is, it will be interesting to see how the fashion industry changes in the coming years.

We’ve been keeping track of the major stories making the procurement and supply chain news this week…

Procurement “Underpaid and Unrecognised”

  • A new salary survey report from Next Level Purchasing Association (NLPA) has suggested that procurement professionals are being underpaid.
  • The Purchasing & Supply Management Salaries 2016 report has shown that average global salaries for the profession have decreased by 7.5 per cent.
  • This leaves the average global salary around $53,000 USD, although the average covers professionals at all organisational levels, and across six continents.
  • The NLPA has suggested the best way for professionals to combat this is to get themselves recognised for value contributions to their organisation.

Read more at Supply Chain Quarterly

ISM Announces Annual Awards

  • ISM has announced its Persons of the Year, Affiliate of the Year and Affiliates of Excellence Awards at ISM2016
  • The Persons of the Year Awards sit across five categories: Education; Innovation; Leadership; Marketing & Communications; and Volunteer of the Year.
  • The Affiliate of the Year Award, won by ISM Cleveland this year, recognises excellence in core competencies, membership growth, and professional development opportunities.
  • ISM Cleveland was also one of the eight affiliates recognised with Affiliate Excellence Awards, for demonstrating an awareness and distinction in their professional operations.

Read more at ISM

Oil Settles Under $50 as Supply Worries Resurface

  • Oil prices touched  the $50-per-barrel mark on Thursday 26 May as production outages brought a faster-than-expected recovery to an oversupplied market.
  • Global benchmark Brent crude oil was down 35 cents at $49.40, having earlier risen as high as $50.51 in intraday trading.
  • Adding to outage concerns, a source at Chevron said the producer’s activities in Nigeria had been “grounded” by a militant attack, worsening a situation that had already restricted hundreds of thousands of barrels from reaching the market.
  • Investors will be watching next month’s OPEC meeting for signs of an output hike now that oil had reached $50.

Read more at CNBC

Adidas Unveils New Robotic Factory in Germany

  • Adidas, the German maker of sportswear and equipment, has announced it will start marketing its first series of shoes manufactured by robots in Germany from 2017.
  • The company is facing rising production costs in Asia where it employs around one million workers.
  • It plans to open similar factories in the UK or France following a test period in the third quarter of this year.
  • Arch-rival Nike is also reportedly developing a robot-operated factory.

Read more at The Guardian

Hyperloop Reveals New Material for Capsules

  • Hyperloop, the revolutionary transportation system and brainchild of Elon Musk, has announced more details on the manufacture of their travel pods.
  • Vibranium, more commonly known as the material used for Captain America’s shield, is the name for a new alloy created specifically for Hyperloop.
  • The material is made of woven carbon fiber, and the company claims it is ten times stronger and five times lighter than steel, and eight times stronger and 1.5 times lighter than aluminum.
  • Vibranium has also been designed to be a ‘smart’ material, able to relay real-time data on temperature, damage, structural integrity.

Read more at Futurism

Australian Shines Spotlight on Unethical Supply Chains

Australian fashion brands are bearing the brunt of increasing unwanted attention for unethical supply chains.

Fashion Unethical Supply Chains

No-one wants to talk about it. But if you’re working in procurement for the fashion industry, you’re in the hot seat.

Fuelled by consumers’ love affair for fast fashion, the fashion industry is finding ways to produce faster and cheaper apparel than ever before. The latest example of this is Kmart and Target producing school uniforms for $2 an item, in a marketing campaign that made recent headlines for all the wrong reasons, given that factory workers are paid below levels that can cover basic living expenses.

The broader industry is digging its own grave, and, in years to come, the fast fashion industry will cease to exist, warns an Australian fashion industry authority who has worked on both sides of the fence.

A Different Way to Do Fashion

Catherine van der Meulen (formally Taouk) worked her way up in her father’s teen, fast fashion brand SUPRÉ for 15 years, which specialises in mass-produced, cheap fashion. During those years, the potential issues of unethical supply chains never crossed her mind.

She’s since realised the error of her ways, designing the Raw to Store movement to educate businesses about the spectrum of impacts generated by the fashion industry globally.

“Since leaving SUPRÉ, I’ve realised that there’s another way to do business, and it’s not this ruthless, cut everyone down to make money style of business that’s operating in the fashion world today,” van der Meulen says.

“I wish I’d have known back then what I know now about ethical fashion and conscious capitalism in my days at SUPRÉ. I wish I knew that the impact of our decisions can have a negative impact on others without me even knowing it.”

Raising Awareness

But she’s making up for lost time. Late last year, van den Meulen landed the role as head of corporate sustainability at Clean Cut Fashion – Australia’s industry body for ethical and sustainable practice. The organisation connects Australia to the global sustainable fashion movement and encourages national retailers to be more mindful of their supply chain.

She has only been in the role a few months, and is starting by raising awareness and contacting the industry’s worst offenders in search of a commitment.

“I’m starting with exemplifying the ones that are doing well in creating positive impact in the industry. We want to empower the great work of the brands that are committed to change and use that to teach other brands,” she says.

Issues associated with unethical supply chains include building an entire brand on an unsustainable business model, bad publicity, consumers turning to social media to vent about brands doing the wrong thing and, of course, knowing that you’re paying workers less than they need to live on in their own countries.

Collective Responsibility

Cath-van-den-Meulen - Unethical supply chains

Cath van den Meulen

“It’s my job to look at the supply chain of these fashion brands here in Australia and open up discussions around what’s being done to improve the processes. There’s plenty of room for improvement out there. But there’s generational corporate resistance to work through,” says van den Meulen.

She hopes to bring about change among Australian fashion brands that rely on mass sales by producing ‘loss leaders’ (extremely cheap items that are highly publicised), which are commonly mass-produced in unethical supply chains and manufacturing establishments in third world countries, she says.

To highlight the sheer size of the issue of unethical supply chains in Australia, she points to the Australian Fashion Report prepared by Baptist World Aid Australia, which last year named and shamed Australian fashion brands that haven’t cleaned up their supply chain or protected workers overseas.

The report was released two years after the fatal Rana Plaza factory collapse in Bangladesh, which saw the lives of 1,129 factory workers die. This event has put a black mark against the collective fashion industry, and van der Meulen says everyone needs to take responsibility.

Australian Offenders

The Baptist report named iconic Australian fashion brands as worst performers, such as the Just Group (owner of Just Jeans, Jay Jays, Dotti, Peter Alexander and Portmans), fast retail brands like Ally, Valley Girl, Temt and Industrie, and low cost suppliers like Lowes and Best & Less.

These companies each received D or F grades because there was little evidence they were doing much, if anything, to protect workers overseas. Many had little or no publicly available information and/or didn’t respond to requests to engage with the research process.

Oxfam Australia also released a report late last year naming the Australian brands dodging workers’ rights. The report named Best & Less as making the least progress of all the companies Oxfam has been engaging and assessing. The Just Group was also named in the report as another company sourcing from Bangladesh, which has so far refused to sign the Fire and Safety Accord.

“The truth is that you can create a profitable and sustainable business model while also doing the right thing as a corporate citizen. And yet there’s so much toxic fashion out there that consumers can purchase clothing for the price of a coffee is utterly obscene. Everyone needs to take responsibility for there to be change.”

Procurement – Authentic and Transparent

And while almost impossible to put a figure on the cost of cleaning up unethical supply chains, she recommends that procurement professionals approach this mammoth task in an authentic and transparent way.

Procurement professionals need to take responsibility for what’s happening further down the supply chain, starting with an independent audit to uncover and document the issues, she says.

“Where the cotton is from that you’re using, for example, can have one of the biggest impacts on the cotton industry globally. These are questions procurement people should be asking that demand answers.”

“I recommend that fashion brands start out by doing the B Corp assessment, which take just 90 minutes and gives you a rating out of 200 to see where you stand today,” she says.

Next, work out where you can make the most impact within your supply chain, and commit to starting an improvement program.

“Just focus on one thing that will improve your supply chain by 1 per cent this year. This could include improving energy consumption or waste water, changing suppliers, or sourcing more ethically produced products,” van der Meulen says.

The True Cost…Of Everything

Do you know what the true cost of your supply chain is? In an age of ethics and transparency, ignorance and apathy are no longer acceptable, says Lucy Siegle.

Lucy Siegle - True Cost

When it was first released, viewers of the True Cost movie, the award-winning feature length documentary, were shocked and appalled as they learned the true cost of fast fashion.

The human rights and sustainability issues were all there for us to see.

The true cost of most of our supply chains are not fully known and this is a quest for most procurement pros. That’s why we’ve invited Lucy Siegle, broadcaster, writer, journalist, and trail blazer in sustainability and ethical living, to inspire and instruct us on how to be better.

Lucy is at the forefront of the fight for a sustainable approach to supply chains, that protects the planet and its people.

At the Big Ideas Summit 2016, Lucy Siegle will challenge CPOs and experts on how they view their supply chains. She’ll be asking what can be done differently to prioritise sustainability. She says:

I love big ideas – who doesn’t?! But I also like small ideas, incremental steps and ideas that are yet to be fully formed. So what I’m always interested in hearing and alert to is how we can get ideas of all shapes and sizes implemented. And how we can build momentum behind change.

It’s no secret that we face a number of big issues in supply chains from resource scarcity and contraction to degraded human rights (and in some cases slavery) in supply chains. What are the mechanisms for shifting the dial on these issues, and putting these big ideas into motion?

What got you involved/interested in sustainability in the first place?

I guess the idea that you can change negative outcomes. I first heard about women like Vandana Shiva in the 1970s – the original tree huggers if you like. These women protected old growth forests in Northern India, not just by placing themselves between the tree and the logger, but by strategically educating and empowering local people to take a stand.

I was also lucky as a kid that a curriculum experiment in the 1980s meant that I got to take Environmental Science as a subject from the age of 12. I was hooked! Sustainability is the science of resource use, ecology and environmental science mixed with psychology and creative marketing. That’s a heady combination to me!

You spoke recently about the ‘forgotten people’ in the fashion supply chain. Why do you think consumers have lost sight of the origins of their clothing?

Because very simply fashion has become a vehicle for turbo-charged capitalism and globalisation. The problem probably began as soon as the Spinning Jenny (invented in the UK) gave us a fast way of spinning cotton. But the real speed has picked up in the last 10-15 year as fashion’s become the ultimate free market poster industry.

Fast fashion (as we call the phenomenon of high volume, low cost, outsourced production) isn’t just a fashion option, it’s a domineering, all conquering, pervasive model. It wipes out all other production methods (goodbye mid-market, slow fashion), ensures that consumers become addicted to buying cheap and in bulk, forsaking all other previous standards (such as quality, wearability, longevity) and dictates trend, price and lifespan.

The consumer becomes overwhelmed and brainwashed by price, speed and brand. Nothing else matters, least of all the ethics of who made the piece and in what circumstances. Fashion is now made and marketed by big brands as if it’s disposable, and who bothers to invest in the backstory of disposable products?

The True Cost movie highlighted some truly shocking practices in fashion supply chains. What can we, as procurement professionals, do to change this?

Well there’s a lot that can be done. Firstly there’s the reputational lever. The True Cost as a movie exists because the Rana Plaza complex in Bangladesh collapsed, killing over a thousand garment workers.

The director of that movie, Andrew Morgan, was so moved to see TV footage of two small boys searching in the rubble for their garment worker mother that he investigated how this could possibly happen. He had no interest in fashion. So highlighting these supply chain truths is very important.

The risk of reputational damage can really lead to a lot of change. Increasingly we’re also seeing anti-slavery legislation (from Dodd Frank to our own UK anti-slavery bill). There’s a perception that this just means corporations will employ a load of lawyers to get around these rules and regulations. Perhaps the short sighted corporations will, but excellent supply chain professionals have the opportunity to show how these regulations should be used to effect positive change and link compliance to improvement.

I also think there’s huge scope to ally the human with the environmental. We shouldn’t just ever think green, but think holistically ethical – environmental and social justice. That’s the only way to plan for the longterm.

I’m also big into collaborations. I’ve seen some really strange collaborations – including between Greenpeace and fishermen, which I would never have seen coming. In fact they used to be sworn enemies. But these collaborations have ended up being hugely successful in ethical terms. Some of those should be with lawyers.

It’s also worth looking at legal remedies too. We’ve noticed (or rather our lawyers have noticed!) that ironically some of the speed and devil-may-care approach to production in ‘host’ low wage economies are in direct violation of WTO rules.

Have you come across any good examples of good procurement/supply chain practices in the fashion supply chain that we can learn from?

Lots of individual supply chains have great merit. So there are some on leather (an incredibly intensive, impactful commodity – and no, it’s not a harmless byproduct!) that I’ve investigated where climate scientists have worked directly with rancheros in the Amazon and then designers in Italy to create zero deforestation accessories for Gucci.

Or I’ve also investigated a progressive jeans company that’s one of few fashion companies to pay its sewers a living wage. I’ve also worked a lot on brands like Patagonia that explores aggressive transparency and some pretty counter intuitive advertising to get the message across.

And what about the surf-wear brand I came across that spent years working with a  farmer to breed a particular type of endangered sheep?! I’ve come across many examples, from the seriously certified trail-blazers to the certifiable! But what’s difficult is of course scale and outreach.

Lucy Siegle will cover these topics, and more, during her keynote address at the Big Ideas Summit on April 21st.

If you’re interested in finding out more, visit www.bigideassummit.com, join our Procurious group, and Tweet your thoughts and Big Ideas to us using #BigIdeas2016.

Don’t miss out on this truly excellent event and the chance to participate in discussions that will shape the future of the procurement profession. Get Involved, register today.