- Sustainability is good for the environment, workers, and your bottom line.
- Building sustainability into the apparel supply chain requires working with both first-tier and lower-tier suppliers.
- Businesses should get to know lower-tier suppliers rather than relying on the cascade effect to keep them in line.
- Businesses can set specific goals to encourage suppliers to be more sustainable or take an indirect approach through training and education.
- Collaborating with other businesses in the industry can increase the pressure on suppliers to be sustainable.
- Traceability solutions can help improve sustainability throughout the apparel supply chain.
Many fashion and apparel companies are able to ensure sustainability in first-tier suppliers but struggle to ensure sustainability in the lower-tier suppliers that supply them. Ideally, every supplier in the supply chain needs to be committed to sustainability, and there are several strategies you can use to boost commitment and compliance.
To point you in the right direction, this guide covers tips to help you improve the sustainability of your supply chain. More importantly, these strategies will resonate with consumers while also helping the world’s laborers and the environment.
1. Only work with suppliers committed to sustainability
When you reach out to new suppliers, make sure they are operating sustainably. Verify their internal sustainability practices and find out if they require their suppliers to be sustainable. Make it well known that your business only wants to work with sustainable partners.
When selecting a new supplier or renewing the contract with an existing supplier, talk with them about their health, safety, environmental, and labor practices. Also, have a discussion about their sustainability requirements for their own suppliers.
2. Don’t rely on the cascade effect
The cascade effect refers to situations where businesses rely on their first-tier suppliers to make sure lower-tier suppliers are sustainable. In most cases, this approach doesn’t work. The cascade effect often breaks down because companies don’t have direct relationships with their lower-tier suppliers.
Say, for example, you’re a bag manufacturer and you purchase hardware from a company that you know is sustainable, however you fail to conduct any due diligence on its suppliers. Unfortunately, the lower-tier supplier who provides the materials to manufacture the hardware is not environmentally friendly and regularly commits labor abuses.
Although you don’t have a direct relationship with the hardware materials provider, its actions may still reflect on your brand’s reputation.
3. Get to know lower-level suppliers
Rather than relying on the cascade effect, you need to get to know your lower-level suppliers. Map out all of your suppliers and their suppliers to learn as much about lower-tier suppliers as possible.
Include these suppliers in your sustainability efforts. Select a point person from your company to talk with lower-tier suppliers as needed.
4. Set reasonable expectations for suppliers
Often businesses force their suppliers to ignore sustainability by forcing unrealistic expectations on them. For example, if a company submits an order that exceeds the supplier’s production capabilities, the supplier may force its workers to work a dangerous number of hours or in unsafe conditions.
Suppliers don’t want to lose customers, and they may make unsustainable decisions to keep them. Avoid setting unrealistic deadlines or making excessive order demands when you’re trying to prioritize sustainability. Give your suppliers room to do the right things.
5. Set short- and long-term sustainability goals
If you want your apparel supply chain to be more sustainable, you need to set and monitor goals for your suppliers and yourself. Be very specific about your goals so you can measure progress more effectively.
For example, you may want to require a supplier to allocate a certain percentage of its procurement spending to sustainability companies. And then, you may want to let the supplier know when you will be checking back on their progress.
Ensuring your suppliers remain accountable, transparent and adhere to your standards of engagement needs the right technology. Logility’s compliance solution provides a centralized system from which to evaluate, manage and report on supplier activity.
6. Consider an indirect approach
Rather than requiring suppliers to meet specific sustainability goals, consider an indirect approach to supply chain sustainability. For example, if you offer sustainability training and incentives to first-tier suppliers, they may be inspired to make changes to their manufacturing processes that benefit workers and the environment.
They may also see the importance of ensuring their suppliers are sustainable. In this situation, you haven’t forced their hand, but you have shown them the right way forward.
7. Create a preferred supplier program
If you have a large number of suppliers, you may want to invite the most sustainable ones to join an exclusive group. Their preferred status strengthens their relationship with you, and being in the group allows them to network with other sustainable businesses.
Alternatively, you may want to offer sustainable awards or give out longer contracts to sustainable suppliers.
8. Collaborate with other businesses in the industry
You cannot fight against labor or environmental injustices on your own. Get together with other businesses in your industry and put pressure on suppliers to become more sustainable. Also, consider telling suppliers that they must be a member of certain trade organizations before you are willing to do business with them.
Many industry groups require their members to embrace sustainable practices or meet certain sustainability thresholds. Additionally, when you know that a business is a member of a reputable group, you don’t personally have to monitor their practices. You can rely on the group for that.
9. Commit to continual improvement
Sustainability is not a static concept. It is constantly changing, and if you want your supply chain to be as sustainable as possible, you need to commit to continual improvement. Be ready to adopt new practices as environmental or social best practices change.
In addition to implementing these tips, you also need to understand where your supplies are coming from. You need digital solutions that can help improve the traceability of your supplies. Traceability improves the visibility of your supply chain and makes it easier to keep an eye on the practices of lower-tier suppliers.
Contact Logility for traceability and other supply chain solutions
At Logility, we create solutions that leverage artificial intelligence and analytics to improve supply chain management. Whether you want to improve sustainability, increase precision, improve performance, boost supply chain visibility, or accomplish other objectives, we can help you.