FRANCE: Auchan plans to tackle unauthorised subcontracting
French retail giant Auchan has set out a plan to try to combat the problem of unauthorised subcontracting in the production of its own brand textile and clothing products.
The move has been prompted by checks carried out by the retailer on its suppliers following the collapse of the Rana Plaza factory building in Bangladesh earlier this year with the loss of more than 1,100 lives.
While the company stressed it had not placed orders in any of the workshops in Rana Plaza, investigations suggested one of its suppliers in the country had violated its contract by subcontracting part of an order to an "unreferenced site."
The retailer sources from 70 production sites in Bangladesh belonging to 47 suppliers, and has signed up to the Accord on Fire and Building Safety in Bangladesh.
It reiterated its commitment to sourcing goods from the country, working with its Bangladeshi partners to develop a safe and sustainable textile industry. It has also set up a team in Dhaka to carry out unannounced inspections of all its production sites.
But it has also "decided to go further and actively work on a very concrete plan of action to further secure the traceability of all textile products to our brands throughout our markets."
The intention is not to prevent the company's suppliers from engaging in subcontracting, it says, but to combat unauthorised subcontracting, where work is carried out in factories not previously audited by Auchan.
Among the new measures proposed are requirements for all suppliers to sign a new code in 2014 outlining the group's ethical and social responsibility, and tighter controls including more unannounced site visits.
There will also be stronger penalties for any supplier using an undeclared subcontractor, with immediate cessation of business. All supplier contracts will rewritten to this effect from September.
Buyers will not only be trained in security and ethics, but also on the impact that buying practices have on price and production.
There are also plans to set up a web portal by the end of this year where suppliers will be required to report on the manufacturing of orders at least 24 hours before the start of production.
Auchan also expects to strengthen its partnerships with a number of strategic suppliers, working closely with them to provide more visibility on upcoming orders, thereby removing the temptation to outsource. By 2017, the retailer says it aims to work with 100 strategic suppliers covering 80% of its textile business.
The issue of illegal and unauthorised subcontracting is one of the biggest challenges facing the garment industry in many developing countries, with Western apparel brands and retailers repeatedly caught out when their products are found being made in fire-damaged or collapsed factories without their knowledge.
Sourcing companies have tried to control this through the terms of their commercial contracts and even through their corporate codes of conduct, but even so have failed to prevent transgressions.
Two recent articles on just-style have argued that more needs to be done to tackle the problem of sub-contracting, including taking a closer look at buying practices and their ramifications across the supply chain.
- Why do modern robotics elude sportswear makers?
- Traditional financing is a misfit for fast fashion
- Trump trade policy – Who knows what he'll do?
- Planning is key to an effective inventory strategy
- How would end of NAFTA affect US apparel industry?
- US Q3 in brief - G-III Apparel, Express
- Bagir exports first trousers for H&M from Ethiopia
- Film documents Cambodia garment workers' stories
- Esquel efficiency drive continues to boost brands
- Pakistan suspends India cotton imports
- Outdoor performance apparel 2016: A broader perspective
- Global market review of lingerie – forecasts to 2022
- Global apparel markets: product developments and innovations, October 2016
- Footwear Top 5 Emerging Markets Industry Guide_2016
- REPORT BUNDLE: Africa-Med, Southeast Asia and Central America strategic sourcing pack