When supply lines become too bloated, providing transparency can become more of a hassle than companies think it's worth. Unfortunately, as the apparel industry recently discovered, a lack of manufacturing and distribution oversight can lead to disasters that can not only hurt the bottom line, but endanger human lives, as well. Businesses should mourn these tragedies, but not thoughtlessly. Leveraging the revelations of the last year's disasters at Rana Plaza, as well as the destructive Tazreen Fashion fire in November 2012, companies can bring in new technologies and strategies to help them ensure better operations and supply chain management.
Bangladesh has long been established as an epicenter for textile manufacturing. However, notoriously loose regulations have allowed several apparel industry giants, such as Wal-Mart and JC Penney, to relax labor standards and introduce unsafe working conditions, according to Time magazine. When Rana Plaza collapsed in April 2013, killing more than 1,000 people, industry leaders were divided on how to handle the situation. Some took on an apologetic tone, while others struck a more defensive posture.
How Individual Companies Responded
Primark, a popular British retailer, was one of the major companies implicated in the factory's collapse, and has since helped the victims' families by providing monetary support, Time confirmed. But before the company began extending charity, Primark officials attempted to shift blame from themselves to the Bangladeshi government.
In a June 2013 interview with The Guardian, Katherine Kirk, head of ethical trading for Primark, immediately shirked responsibility on behalf of the companying, claiming that choosing Rana Plaza was not a decision motivated by cheap clothing. She estimated that 98 percent of factories are shared amongst apparel industry stakeholders, and when comparing Primark to the others, Kirk said her company was doing more.
"We were doing as much if not more than other brands," she stated. "We looked at all the risk we were aware of and were trying to mitigate and make sure people were working in safe places. We were not doing structural surveys and no other brand was doing structural surveys."
Where Change Needs To Happen
At a recent Retail Week Live event, leaders from every corner of the industry came together to discuss the true implications of the Bangladesh disasters now that the dust has settled. According to Just-Style, event attendees ultimately concluded that apparel industry supply lines have become too expansive and complicated for purchasing companies to ensure adequate transparency and worker safety. Rick Darling, executive director of government and public affairs at Li & Fund, claimed during the event that apparel industry supply chains have become too big to handle, with businesses regularly handling between five and six second- and third-tier suppliers for every supplying factory. Considering that some larger retailers work with more than 15,000 factories worldwide, which are likely connected to another 75,000, distribution and manufacturing lines have simply become too large to handle, Darling confirmed.
Industry leaders need to focus on supply chain optimization. They need to begin trimming the fat and making sure that distribution lines are more organized and automated, which will allow workers to dedicate more time to transparency and ethics.