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While some may have seen the Covid turmoil come sooner than others, and some companies may have been able to pivot early on, it is safe to say that the pandemic was truly a case of force majeure, or indeed. other words a complete act of God.

It is natural to reflect on alert experiences like these. Are they changing us as people and organizations, are we learning from them, or are we creatures of habit, quick to revert to old ways of operating? For the purposes of this article, I’d like to focus less on societal behaviors and more on the impact of Covid on our non-textile supply chains and how we as an industry have responded. .

Let’s give everyone a free pass for a moment on how they behaved during the first few months of the pandemic. No one knew how long it would last, sales for many quickly dried up and the world was helpless and panicked. It is understandable why many have resorted to self-preservation. Fire, leave, cut media expenses, accumulate money, borrow from lines of credit, and cancel anything and everything you can at the factory level. All of this was done with little regard for the long-term impact of short-term thinking. I have written and spoken publicly about how I think certain brands and retailers could have better handled their relationships with factories. The utter disregard for the financial distress of suppliers and their thousands of workers was short-sighted and was not in line with the ESG mantra many preach. But again, for the purposes of this article, I’m going to give everyone a pass. It was a situation no one had experienced before, there was little preparation and few contingency plans, and the survival of the base was a priority for many.

But what about today? What has the Covid taught us? Are we becoming better people and businesses based on the lessons learned? Or are we reverting to bad and dangerous habits?

I’ll be frank: I’m worried. I have received too many phone calls from concerned factory owners and procurement officials. For many, the past year was a disaster from a business perspective, to say the least. As demand rebounds quickly, many of my contacts worry that the orders placed are far too optimistic and, in some cases, genuinely reckless. How come some companies are booking at levels much higher than 2019? Should order levels really be 120 or even 130% higher? What to do with the factories? Are they hiring 1,000 more workers to meet this demand?

Garment workers in Bangladesh.

By asking brands for projections, factory owners are trying to be responsible with their workforce and make sure they don’t have to relocate staff again. Brands, however, are unwilling to make concrete commitments. What if a new variant hits the United States, or the country of manufacture? What happens to all this product? What will the landscape look like in six or twelve months, when unemployment benefits dry up, massive inflation hits us harder than we can imagine, and perhaps a recession enters the conversation? Will the factories hold the sack once again? Victims of poor planning and neglect on the part of the brand.

But some of the practices I see now go beyond what many would even consider basic ethics. We all know that the brand-manufacturer relationship is inherently one-sided in favor of those who place the orders. The rules and regulations put in place in supplier operating manuals have always left manufacturers responsible for meeting sometimes demanding requirements. The smallest violation would result in chargebacks, whether it’s a one-day delayed delivery, a sticker on the wrong side of a box, or a failed needle inspection. I sometimes think this attention to detail is a ploy by the retailers to generate a few extra dollars in revenue.

While these type of commissioning agreements have always been in place, the language I see now, showing no quarter for even an “act of God,” borders on inconvenience.

Considering what we have been through over the past 18 months and many empty words about “rebuilding partnerships”, I was unfortunately not surprised when a factory owner provided me with some order conditions from a well-known brand. I reprinted them directly here:

  • Seller is solely responsible for shipping delays, whatever the cause, including fortuitous events or other circumstances beyond the seller’s control.
  • The Company may cancel this order in whole or in part in the event of a lockout, strike, unavoidable accident, riot, war, fortuitous event, fire, flood, earthquake or any other victim, similar or different, affecting one of the of the premises of the Company.

Coming directly in the aftermath of a pandemic, strengthening power dynamics, while possibly standard practice, seems less than empathetic on the part of a business “partner”.

No protection for factories means we are playing roulette with jobs and workers’ lives. If the bull market continues, everyone wins, but the buyers are home, and if at any point the game turns, the factories will lose again. Can factories survive this “second wave?”

I ask factories, what’s wrong with being an opportunist? If there is pent-up demand, shouldn’t companies capitalize, shouldn’t they hunt these goods? Do you want screenings? How does it protect you? What is stopping someone from rescinding or going back on their word if things go wrong? We have seen this happen too recently.

Unfortunately, while Covid has taught us the dangers of aggressive inventory positions, too much reliance on China, and the working capital pressure required to operate a supply chain six months later, which we What we see now is that in many ways companies are acting even more cavalier than before Covid.

It’s ironic for me to have these conversations when at the forefront of most organizations are their ESG commitments, their 2025 sustainability goals, and their investments in a more transparent organization. If we want to build a better, green, sustainable and circular industry, then we need to change the dynamic between buyers and suppliers. I have been a buyer, I know the power we have, what the pressure of filling these lines every month means for a factory, the responsibility of feeding thousands of workers every month, and how pennies and rupees can send. your request on the street in another factory.

This article is not trying to tell you what to do. But if Covid-19 made you fight and think only of yourself, then what changed in 2021? When you have time to think, reflect and act on it, are you acting in good faith and responsibly or is this an intentional abuse of the power you have over your so-called “partners”? “? Only you reading this know your intentions. You alone have the power to change the dynamics, reshape the way this industry works and rewrite the future of fashion.

Edward Hertzman is Founder and President of Sourcing Journal and Executive Vice President of Fairchild Media Group. Hertzman graduated from New York University with an economics degree and spent more than a decade working as a senior executive for large procurement companies around the world, including Synergies Worldwide and Pearl Global.

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