In the journey to build out Shahi’s sustainability agenda and to scale impactful worker wellbeing initiatives through Good Business Lab I have come to realise that in the fashion industry, sustainability is inextricably linked to purchasing practices.
To put it boldly, the transactional nature of buyer-supplier relationships is potentially one of the biggest barriers for the industry to innovate and solve pressing challenges.
Goals ranging from net-zero carbon footprint to living wages require deep collaboration between many stakeholders. Unless we address the fundamental relational issues and bring brands and suppliers together to work as true partners, we are likely to continue facing the same outcomes — buyers feeling that suppliers lack initiative, and suppliers feeling that buyers lack commitment.
Given the inherent power imbalance between the two stakeholders, suppliers are often not able to share their perspectives on purchasing practices without risking their business relationships. This is why as a representative of Shahi Exports, a large garment manufacturing firm based in India, I am delighted to join the Board of Directors of Better Buying Institute (BBI), which was set up in 2015 with a mission to enable buyers and suppliers to work together with responsible purchasing practices to achieve shared goals of profitability and social and environmental sustainability.
Better Buying’s anonymous supplier surveys indicate that brands who have started the process of collecting supplier data are already improving. The 2021 Better Buying Partnerships Index found improvements on the part of Better Buying subscriber brands and retailers in six out of the seven categories of purchasing practices, including Planning and Forecasting and Cost and Cost Negotiation.
Buyers are significantly more open to working with suppliers to understand the pain points and develop win-win partnerships. We have experienced first hand at Shahi the ways in which partnership and free flow of data form the foundation for co-creation of impactful and innovative solutions.
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A long-term commitment by some of our customers has enabled us to expand our spinning, weaving, and knitting capacities this year, along with multi-million dollar investment in our solar farm in 2018. Another example is DXM, a software-as-a-service platform that enables on-demand, customised manufacturing and inventory optimisation by stitching together different silos of stakeholders in the supply chain. DXM is set up as a joint venture between four suppliers (including Shahi) and a brand partner, with each partner having an equity stake in the company. Establishing trust and recognising that brands and suppliers bring equal yet differentiated value to the table was key in setting up this first-of-its-kind partnership.
While I’m encouraged by these collaborations and trends, there’s still a long way to go in rebalancing the power dynamics between buyers and suppliers. A shift in mindset for both suppliers and buyers is crucial in driving change. Manufacturers, who employ large groups of workers and utilise natural resources for production processes, need to recognise the inherent knowledge and influence they hold in driving a sustainable future for the fashion industry. Brands, as consumer facing companies with large buying power, can reduce inefficiencies and unlock innovation by shifting the traditional “command and control” mindset to a more collaborative and open relationship that views their supply chain as value-adding partners.
Ultimately what motivates me in this new role at Better Buying is the growing awareness and acceptance in the industry that business practices such as forecasting, costing, and payment terms have a massive impact on workers’ wellbeing, environmental sustainability, and innovation. Better Buying has been successful at measuring and disseminating the state of purchasing practices in a transparent way – and the time for the industry to come together and act on this is now.
The Better Buying Partnership Index acts as a quick status update on the quality of buyer-supplier partnerships, enabling year-round monitoring and analysis of emerging issues and trends, and potential problem areas. It’s completely anonymous, and takes just five minutes for a supplier to rate each of its customers. Shahi is encouraging all suppliers to take part, and for brands and retailers to share it with their suppliers so they can start rating their purchasing practices.
About the author: Anant Ahuja is head of organisational development at Shahi Exports, the largest apparel manufacturing company in India, operating over 50 factories and three processing mills across nine states. He is also the CEO and co-founder of the Good Business Lab, a not-for-profit labour innovation organisation established to encourage businesses to improve workers’ lives. The Good Business Lab uses robust research methods to find common ground between worker wellbeing and sustainable business interests.