Transferring knowledge down the supply chain will help improve compliance

Transferring knowledge down the supply chain will help improve compliance

Visibility into the entire apparel and textile supply chain – or "monitoring down to the mill" – is one of the biggest challenges facing brands and retailers – and one that a new software tool aims to tackle.

"I think we'll probably face one of the biggest shifts in the industry over the next five years, where we'll see knowledge being transferred down the supply chain in order to get better compliance," explains Guido Brackelsberg, managing director at Setlog.

It’s not just that companies often don't know who is in their supply chain beyond their immediate suppliers, but without this information it is impossible to make informed sourcing decisions and reliable product claims.

Perhaps best-known for its OSCA Supply Chain Management solution to help companies manage their supplier base from purchase order to production, product quality and logistics, Setlog’s focus over the last two years has shifted to include vendor compliance management (VCM).

"The challenge for brands/retailers is that they know their tier-1 suppliers but not their entire supply chain," Brackelsberg tells just-style. "We're [now] looking at a vertical integration of the supply chain to help them see the complete structure, who are the factories, the sub-contractors, the dye houses, the mills and so forth."

The OSCA VCM cloud-based portal has evolved with customer feedback, and is set up to represent the sourcing workflow. Much of the data it requires is already held within the brand, albeit in several different places, so a key benefit is that it can now be centralised on one platform – and accessed globally – by in-house teams on the one side and all the supply chain partners on the other, ranging from suppliers to mills or third party service providers such as testing institutes.

Supplier information includes factory profiles and production data but also extends to social and ecological standards such as working conditions, the use of chemicals, and fire safety regulations.

The goal is to involve suppliers as early as possible so that they become proactive in driving better manufacturing conditions. The tool also makes it easier to compare various manufacturing sites, follow-up on individual audit findings and allows audit documents, reports and corrective actions to be filed in, and stored on, one central location.

Suppliers can be assigned tasks within the system, and collaboration is encouraged through questionnaires and reviews on specific issues. Ratings can also help identify potential risks and areas for improvement. To ensure knowledge has been transported down the supply chain, an e-learning component is also integrated, using tools such as surveys to test workers.

For retailers and brands there are other advantages too, including savings in manually gathering vast amounts of information.

Brackelsberg also believes the portal has the potential to generate savings by exposing just how big a company’s supply base is. "Monitoring down to the mill is not just to make the world a better place, but also because of economies of scale: the fewer dye houses that are used the higher will be my utilisation with them, I'll get better prices, and controlling the compliance of my supply chain will be easier."

The portal doesn't replace an existing ERP or PLM software but is designed to be a cloud-based "integration gateway" that combines information from these internal systems – in turn enabling collaborative supply chain management by seamlessly connecting all data sources.