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OK - cards on the table - I am an independent ethical auditor. I criss-cross the UK and Ireland visiting factories, talking to staff, examining records and have long conversations with union officials, managers and workers on the vagaries of the ethical assessment systems developed by the biggest retailers and brands. One thing stands out from all of these conversations - the massive difference in how buyers respond to audit reports once I walk out the door.
I have no hard evidence to back up my point of view - it's all anecdotal but it's all pretty consistent. Now pretty obviously I would be the first to counsel any business to have a robust system in place to deal with suppliers who aren't holding up their end of the deal. If suppliers need to be visited time and again, cajoled, suspended and even de-listed if the penny fails to drop, then fine by me.
Where it's harder to defend is where there's a "sledgehammer to crack a nut" approach to these matters; a disproportionate response to the issues found on site. For example, in the UK the law expects employers to retain quite specific records to show that an employee has the right to work in this country. Sometimes this information isn't available but this doesn't necessarily mean that the employee is an illegal immigrant - it could just be a gap in the paperwork, right? I reported a single missing ID at one site and within twenty four hours I got a frantic phone call from my contact there saying that all their orders had been suspended until this had been sorted out. She was distraught. "Surely this isn't fair?" she said, asking me to call the company's customer to make them see common sense.
Another supplier had big problems with sorting out long working hours. This factory was automated and had a low number of highly skilled staff. They acknowledged the problem and estimated it would take about three years to put right. This was mostly down to recruitment, training and safety issues. Within six months they were forced to have another ethical audit - during which, surprise surprise, working hours were again identified as an area where more work was needed.
Key performance indicators (KPIs) permeate all areas of life today, from school league tables to all aspects of commercial life. In and of themselves, they are no bad thing - elsewhere on the ETI blog the targets that Asda have put in place to improve its practices have been discussed. However, where buyers are put under pressure to ensure that no open issues remain in their supply chains, then this is inevitably going to lead to pressure being put on suppliers to "put things right - now!"
Recently my contact at one factory was almost in tears as I delivered news that was likely to lead to another 'open issue.' To her it felt like an open sore that just wouldn't heal fast enough.
The consequence of this pressure, as always, has a human face. Recently my contact at one factory was almost in tears as I delivered news that was likely to lead to another "open issue." To her it felt like an open sore that just wouldn't heal fast enough.
Not all buyers act this way. Many take the long view and appreciate that the world is an untidy, imperfect place - full of nuance and shades of grey. These buyers don't seem to be under any undue pressure to have perfect supply chains and actively work with suppliers to find innovative solutions to problems which yield positive results for all parties. Suppliers to these brands evangelise about how helpful "those people from head office" are.
The law of unintended consequences looms large in the world of ethical trade so next time you're setting goals and objectives, please just pause and think - by seeking to do good, could you actually be doing bad?
What do you think makes for a good KPI? Are some buyers too soft with suppliers and putting their company reputations at risk as well as effectively ignoring problems in the supply chain? Or are others just plain unreasonable in their expectations of the time it takes to resolve issues effectively? I would love to hear your views.