Combatting the Social Compliance Problem With Digital Supply Chain Vendor Management

Combatting the Social Compliance Problem With Digital Supply Chain Vendor Management

April 5, 2019

Whether it’s failing to provide safe working conditions, treating employees unfairly or producing products that contain banned substances, social compliance remains an issue for many fashion companies outsourcing production of apparel, footwear and textiles across the world. For the approximately 75 million people laboring in this industry, the lack of a well-regulated supply chain may make workers subject to forced labor. In return, these conditions could tarnish the reputation and degrade the brand value and revenues of any company who fails to prioritize ethical sourcing and social compliance.

The key to overcoming these challenges is transparency. With millions of workers and factory locations worldwide, increased visibility is crucial to determining whether a company’s social compliance practices are sound. The process is complex and multifaceted, as it involves managing multiple product lines, SKUs and vendors. Traditional ways of managing information, such as using spreadsheets, are unable to keep up with the fast-paced nature of the fashion business. Disconnected, siloed and slow-moving systems could cause the health and safety of factories to slip through the cracks. Instead, automation can assist companies in tracking vendor compliance across its three main elements: evaluation, management and reporting.

Evaluate vendors

While a company should evaluate each vendor it works with on a range of metrics including price and quality, social compliance should be front and center on the criteria list. A digitized approach streamlines the evaluation process, allowing retailers and brands to closely manage all vendors from the onset of the relationship. Through a standardized solution for onboarding new vendors using workflow and achievement modules, companies can receive insight into their overseas factories. Additionally, they can keep a close eye on their factories with automatically generated supplier scorecards and report cards based on current performance metrics.

Manage requirements for ethical sourcing

Standards of Vendor Engagement frequently differ depending on the retailer and brand. Each sourcing destination often has its own requirements for different work criteria – including minimum age, minimum wage and maximum labor hours for factory employees. To manage the frequently conflicting requirements, a digital solution can help centralize the information to ensure all conditions are met. With all vendor compliance documentation, certifications and audits in one location, retail companies won’t miss a beat. They can receive alerts when documents are set to expire and use geolocation features to add an extra layer of visibility, mapping factory locations by physical location and regional clusters. As well, scheduling onsite inspections becomes more efficient and increases the chances that each factory receives a thorough inspection.

Report information in real-time

Finally, apparel brands and retailers can streamline and improve the reporting process by creating a supplier portal that helps gather and share information in real time. Having transparent information and data throughout the entire enterprise will help promote supply chain transparency and build trust with all involved, including stakeholders, factory workers, trading partners and outside vendors. All workers in the supply-chain cycle should be able to easily access and retrieve up-to-date information at any point to support decisions and mitigate risks.

Mitigate risk with Andromeda Vendor Compliance

NGC’s Andromeda Cloud Platform is made to help apparel brands and retailers prioritize ethical sourcing and social compliance by enabling the digital supply chain. With a centralized system that tracks these three parts, companies can unlock transparency and ensure that Corporate Social Responsibility (CSR) and Good Manufacturing Practices are met.

With the proper tools in place, companies can enforce control and accountability for all suppliers, vendors, and other third parties involved in the design, manufacturing and delivery of their product to ensure compliance and avoid costly litigation.

To learn more about how NGC’s Andromeda Cloud Platform can ensure that every vendor is complying while protecting your brand, explore our compliance solution webpage or request a demo today.