The platform aims to help buyers improve the way they negotiate and honour contracts with suppliers

The platform aims to help buyers improve the way they negotiate and honour contracts with suppliers

A new ratings platform is now open and collecting feedback from garment suppliers on the purchasing practices of their customers, with a view to pinpointing areas of good practice and improvements that would support better workplace conditions.

Initially targeting suppliers in East Asia, the Better Buying initiative hopes to turn the garment manufacturing industry on its head with a rating system that allows suppliers to anonymously evaluate the brands and retailers that buy their products. Crucially, it allows them to communicate those purchasing practices that are working well and those that need improvement, without risking their business relationship.

It is also hoped that the platform will spark a 'race to the top' among buyers to improve the way they negotiate and honour contracts with suppliers.

After extensive research in Hong Kong, China, Bangladesh, Cambodia and Vietnam, Better Buying co-founders Dr Marsha Dickson and Doug Cahn identified seven specific aspects of purchasing practices that have the greatest impact on workplace standards for workers.

These are: planning and forecasting, design and development, cost and cost negotiation, sourcing and order placement, production management, payment and terms, and management of purchasing practices.

"Our goal is to support industry-wide transformation of buyer purchasing practices so that both buyers and suppliers achieve their financial, environmental, and social sustainability goals, including decent conditions of work," Dickson explains.

Of the seven purchasing practices, the initial pilot portrayed where the initiative is likely to see the lowest scores. Dickson says these are in planning and forecasting, and in sourcing and order placement.

Of the former, she explains: "Planning and forecasting encompasses primarily accuracy. Is there any visibility from the supplier of what's coming or does it just land with them? That can put pressure on the supplier. And even if you do get a forecast or projection, that can range dramatically from what you actually order.

"I'm hoping this [project] will point to some collaborative efforts to figure out how we can get a better handle on planning and forecasting while still meeting the needs of the consumer," she tells just-style.

Suppliers will see the score their submission generates as soon as they submit a rating. After analysis is completed and scores averaging all ratings have been developed, Better Buying will share those with the suppliers who rated specific buyers. It is anticipated suppliers will use the ratings to "identify and support the best buyers, assess potential customers, and better communicate with existing customers."

"Suppliers are increasingly concerned about the purchasing practices of their customers, the brands and retailers," adds Cahn. "It can become untenable for suppliers and their sources to maintain profitability and protect working conditions when facing large and unpredictable orders with tight timelines at the lowest possible cost."

Stanley Szeto, chairman of the Hong Kong Textile Council, adds: "Better Buying will support buyers and suppliers who are eager to increase operational efficiency, protect their reputations and profits, avoid lost sales, and maintain stable supply chains with the capacity to meet all buyer requirements."

In early 2018, Better Buying will publish an industry-wide report of its findings. Scores for individual buyers will be released in the third quarter of 2018 after a second rating cycle is complete, and the process will be repeated every six months to reflect updated evaluations by suppliers and the improvements buyers have made in their purchasing practices.

Delman Lee, president and chief technology officer of TAL Apparel, believes the initiative will cultivate a "positive dialogue" between buyers and suppliers. "Supplier practices are intimately linked to buying practices and behaviours. The dialogue will only help to create financially sound supply chains that can meet quality, environmental and workplace standards."

Going forward, Dickson says there could be a potential market to expand the initiative with financial institutions, with the creditors, risk management and the insurers.

"All companies are paying insurance premiums for contingent business supply interruption, and if you have smoother, better purchasing practices you are going to have less disruptions in your supply chain. So we can start to explore some potential customers for this kind of information, who want to better the businesses they do business with. Whether they are providing credit for buyers, products to be produced and looking at the payment history of the buyer, or looking at the insurers. The potential might be there for customers from the buyer point of view, but we are still working that out."

But beyond the apparel industry, there is a possibility the initiative, which Dickson sees as becoming a global benchmark on purchasing practices, could expand out to the electronics and toy sectors, as well as food and beverage.

Click here to access the Better Buying site where suppliers can anonymously rate the clothing and footwear brands they work with.

In a guest piece on just-style last year, Dr Marsha Dickson explained the challenges buyers are placing on suppliers – and the goals of the Better Buying initiative.

How data and transparency can encourage better buying