The New Fashion Imperative: Vendor Compliance

The New Fashion Imperative: Vendor Compliance

June 7, 2019

Improving speed to market may be a top priority for retailers today, but there are other critical concerns as well. Ensuring vendor compliance for Corporate Social Responsibility (CSR) and Good Manufacturing Practices is an imperative that’s equally important. As such, modern-day retailers should take measures to prevent unsafe working conditions, tragic factory accidents, or products that contain banned substances.

Facing Challenges Head-On

The Rana Plaza building collapse in 2013 killed more than 1,000 workers and was the deadliest disaster in the history of the garment industry. A high-level government report found that the building was constructed with substandard materials and did not comply with building codes. The tragedies became a rallying cry to ensure safe working conditions for factory workers in Pakistan, Bangladesh and other countries. While some progress has been made, the industry still has a long way to go.

In 2018, Sourcing Journal reported that European fashion retailers H&M and C&A were investigating allegations that prison laborers in China were used to make packaging both companies use. To this day, unfair labor practices and human slavery continue to be a concern.  A clash of corporate cultures can be a part of the problem. As buyers put more pressure on factories to improve turnaround time, they may respond by overworking employees, utilizing underage workers and using unauthorized subcontractors.

Finding the Keys to Compliance

In light of these ongoing issues, managing the intricacies of vendor compliance is crucial. The process is complex, involving brands, retailers, third parties, NGOs and governmental entities at multiple levels. To break it down, companies should view their responsibilities with vendors as three overarching tasks: evaluation, management and reporting. Preventing disaster starts with a thorough evaluation of a vendor, including a review of past social compliance, delivery record and compatibility with the retailer’s corporate culture.

Additionally, vendor standards may vary, as retailers and brands may have differing requirements for minimum age, minimum wage and maximum labor hours for their suppliers. To keep track of compliance, creating a solid reporting foundation is paramount to accessing and retrieving information. This means creating a supplier portal that will help facilitate the gathering and sharing of information, as well as promoting supply chain transparency and confidence among all trading partners.

Creating an Integrated Solution

With the overwhelming amount of information companies have to keep track of, compliance is an area of the supply chain that’s desperately in need of automation. Disparate systems and spreadsheets can have disastrous consequences for retailers and brands. A digital supply chain can break down these barriers with a single cloud-based portal that centralizes and shares all the information that originates in legacy PLM, supply chain ERP, logistics and other systems – including centralizing vendor information and managing compliance deadlines.

With the digital supply chain, Vendor Compliance is no longer a standalone part of your workflow; that’s because a digital supply chain ensures a seamless, real-time flow of information and synchronizes everything in the enterprise, including Vendor Compliance. Designed specifically for the needs of apparel, fashion and footwear brands and retailers, NGC’s cloud-based Andromeda Vendor Compliance solution provides a  centralized system to evaluate, manage and report on all the details simplifying the complexities of compliance management.

With real-time data to support decisions, senior management has the information it needs to mitigate risk to Corporate Social Responsibility (CSR) initiatives and ensure Good Manufacturing Practices. Andromeda Vendor Compliance also enables companies to manage the ever-changing landscape of global Restricted Substances Lists (RSL) and make sure that every vendor is complying.

For more information on digitally optimizing vendor compliance processes to ensure safe working conditions, check out NGC’s whitepaper on the topic.