Blog: Leonie BarrieRisks include worker unrest in China

Leonie Barrie | 4 April 2016

Risks ranging from cargo theft to natural disasters and terrorism incidents are among the biggest threats seen to global supply chains in 2016 – with worker unrest in China and child labour in India among specific challenges faced by apparel firms.

As margins continue to be squeezed, one question often asked by sourcing managers is whether or not to use a trading company. Surely, the argument goes, dealing direct with a factory is the best route to better prices and quality. We take a closer look at why this is not always the case.

Like it or not, brands are also under increasing pressure to respond to consumer needs for instant gratification with a strategy for speed and efficiency in the product development cycle. And how they react will separate the winners from the irrelevant.

As they work towards improving transparency within their supply chains,four fashion brands – G-Star, Ted Baker, Vivobarefoot and Haikure– have for the first time made public their sustainability performance scores using a new assessment tool from European sustainable fashion consultancy Made-By.

But despite a number of catalysts for the apparel industry and its supply chain to devise more environmentally-friendly solutions, the path to success in sustainability is never going to be easy, industry executives say.

Africa has undeniable advantages that make it attractive as a potential source for large volume, low cost commodity garments. However it will take some time for all these ingredients to come together and mirror what China, India, Vietnam and others have done over the last 30 years.

This is exemplified by Egypt’s textile and clothing sector which, despite advantages that include some of the best cotton in the world, thousands of factories, low labour costs and duty-free access to the US and EU, continues to face a mountain of problems.

And problems persist in Bangladesh, where the Accord on Fire and Building Safety has cut ties with ten more suppliers after they failed to implement workplace safety measures.

UK value fashion chain Primark has also confirmed it has doubled the number of audits at its supplier factories in Turkey – less than a month after Next Plc and H&M admitted to finding Syrian refugee children working at their suppliers in the country.

And Swedish fashion retailer H&M is taking its water stewardship efforts to "the next level" as part of a new five-year agreement with conservation group WWF.

Meanwhile, in other news, retailer American Apparel has named Paul Charron, former CEO of Liz Claiborne, as its new chairman; the US is to block imports from Chinese viscose fibre producer Tangshan Sanyou over forced labour concerns; and VF Corp is mulling the sale of its Licensed Sports Group (LSG) business.

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