Does ethical sourcing practices matter to manufacturers and consumers of the apparel industry?

Following ethical business practices is no longer just a moral pioneer. It has now become a critical component of Corporate Social Responsibility. The main aim is to incorporate principles of morality in manufacturing processes reducing, or totally restricting harm to environment, and labor exploitation. Officially textile industry occupies the second most important position next to agriculture. Retail and consumer product industries attract much public attention as customers opinion about the product and its ethically sourcing options are integrally woven. Following ethical sourcing practices in the apparel making process reduces risk of failure in the apparel supply chain.

Ethical Sourcing:

Ethical sourcing ensures that products which are being sourced are manufactured in a safe environment by workers who are ensured of their safety, paid fair wages,and are made to work legal hours. It makes sure that decent labor standards are met in sourcing materials, and the manufacturing process. Employees involved in the various stages of making the apparel need to be paid fair wages, work in safe and hygienic environment, and reasonable hours, and are not subject to any discrimination of working age. Ethical sourcing implies commitment to and employs candid practices that benefit the environment, workers, community and customers.

Ethical sourcing in the apparel industry:

In the past years, apparel companies believed that commercial success depended on the quality of its merchandise, and short lead times for their apparels. But currently, human rights issues, and environmental concerns play a vital role in deciding the success of a business. Following ethical practices have become an important strategy for apparel makers. Today, even the greediest retailer would think twice before offending the growing interest of green consumerism.

Textile and apparel industry, generally assumes that ethical sourcing practices result in higher operating costs, which ultimately results in increasing the product price. A research states that consumers are willing to pay more for goods manufactured using ethical practices. This is due to consumers rising awareness about child labor, sweatshops, and environmental hazards involved in the apparel making processes. So, there is no reason to fear that the business revenue will fall.

The fundamental element of ethical sourcing involves a supplier code of conduct establishing unequivocal standards for the vendor in accordance with the ethical sourcing standard. Suppliers also have to formally sign up regarding quality assurance standards. Various ethical standards have evolved recently. They integrate into a retailer's code of conduct and factories, sub-contractors, and suppliers are required to meet these requirements. Failure in meeting with the requirements will result in the risk of losing orders. Apparel retailers employ external or even internal social compliance auditors to inspect and report to them regarding the actual facts. The audit provides a snapshot of the factory, checking its premises, interviewing the workers and management, checking employment records and other formalities.

Ethical sourcing gives a strong selling point. An apparel maker, being transparent about the business practices can build trust about his brand.

Constraints:

Finding suppliers following ethical methods and enforcing regulations becomes time consuming, a bit difficult to manage, and sometimes costly. Extra staff might need to be employed to supervise the business aspects. Maintaining hygiene, and payment of wages may also push up the production price; occasionally. A major challenge for businesses is to justify the supplier's need; adhering to ethical sourcing standards. The manufacturer needs to be focused to strike a happy balance between his profit margins, and customer's choice of paying for ethical merchandise.

Failure of a manufacturer to link his business with strategic sourcing may also be a barrier to successful ethical sourcing. An organization may have formulated ethical sourcing goals, but might not have executed them through everyday sourcing activities. Failure to link the strategic business goals with operational execution may also hinder its successful execution.

Several industry initiatives are taken to address this global sourcing challenge. Businesses generally need to adopt a multi partner strategy. Apart from its internal assessment, external sources should also be used for evaluating its supply chain partners. A periodic inspection should be conducted to ensure conformance of desired goals.

Ethical manufacturing is not just a philosophy or an approach. It is a potential option to manipulate the buying habits of a business, enhance its brand image and minimize wastage. Ethical sourcing is not an exam with a 'pass' or 'fail' result, but a constant endeavor of any business, and an option to reach higher standards.

References:

1.      Michaelpage.co.uk

2.      Interim-management-purchasing.co.uk