What does the Bangladesh tragedy tell us about supplier management?

At the CIPS Surrey session last week, I talked about supplier information in the broadest sense. We got onto the topic of how much responsibility buyers could, and shoul,d take for driving social responsibility and sustainability in the supply chain.

Just how much can you feasibly do? Is it only first tier suppliers where you have some responsibility, or should you be looking at second and third tiers? Or even more? And what can you do if your suppliers simply lie to you, or have all the right certificates (but obtained locally through bribery, perhaps)?

Of course this was hugely topical given the tragic events in Bangladesh last week, where over 300  people have died after a  clothing factory collapsed. Primark, the UK, are apparently just one of a number of UK and European retailers who are customers of the firms who had premises in the building. So how much should we expect “western” firms to do in order to improve conditions for the workers in their supplying firms? A very tricky question, particularly where (as in this case) there are different tenants on different floors of a factory building.

In the immediate aftermath, there were various calls for Primark to sign up to the Bangladesh Fire and Safety Agreement, which requires the publication of independent building inspections, and was  drawn up by labour rights organisations following the deaths of 112 Bangladeshi workers in a factory fire last November. But Primark have pointed out that this building was occupied by many different firms, making it harder to monitor and regulate.

The Primark spokesman said that like all of its international suppliers, New Wave had been subjected to regular checks on health and safety, working hours and overtime pay.

But he said that a structural survey of the building was not part of this monitoring programme — as this would have involved an inspection of the entire complex, including other garment factories and businesses with whom it had no relationship.

It all shows how difficult it is even when buyers want to do the right thing – situations are often more complex and challenging than they a t first appear.

The conclusion at the CIPS session was that buyers do have a responsibility to do as much as is reasonable and practical, although it can never be 100%. And the question of tier 2 or 3 suppliers? The key is to identify those are truly critical to you – from a supply or commercial point of view, or indeed in reputational risk terms. That doesn’t mean you should disregard others totally, but a good understanding of key priorities and risks will help you decide sensibly where you put your most serious supplier management efforts.

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