New Platform Seeks To Improve the Relationship Between Buyers and Suppliers

We aren't the first ones to purchase the clothes we wear. Before they reach store shelves, these items are bought by brands and their buyers from suppliers, and most of those suppliers are located in developing countries.

Millions of people in developing nations are dependent on international buyers to make a living, as a 2006 report on purchasing practices points out. Many companies have codes of conduct in place for their suppliers. However, all too often the purchasing practices of buyers and brands can undermine the suppliers' attempts to meet these codes of conduct. And that can have “disastrous consequences for the poorest producers,” the report from U.K. fair trade organization Traidcraft found.

In short: Purchasing practices can significantly impact suppliers. Enter a new project called Better Buying, which describes itself as a dialogue and rating platform to highlight areas for improved purchasing practices.

The platform was founded last year by Marsha Dickson, a professor at the University of Delaware’s Human Services program in the Department of Fashion and Apparel Studies, and Doug Cahn, an expert in labor and compliance in global supply chains who leads the Cahn Group, which focuses on factory workplace conditions. It is funded by the C&A Foundation, partners with Fair Factories Clearinghouse and initially focuses on the apparel sector.

“We are excited to be able to provide this new tool which will provide information to suppliers and buyers,” Doug Cahn, co-founder of the Better Buying project, told TriplePundit.

The stated goal of Better Buying is to determine if it's feasible for a Web-based public forum to improve buying processes by allowing suppliers to anonymously provide input about how specific buyers make it difficult for them to comply with codes of conduct. “The notion is that there are purchasing practices that are taken by brands and retailers that make it difficult to adhere to codes of conduct,” Cahn explained.

How will the Better Buying platform work? It is still a work in progress. But the basic gist is that suppliers will register through the site and provide basic profile information, and they will be asked to rate the buyers they have worked with. The ratings by suppliers for an individual buyer will be averaged and, using a formula, the combined ratings will be used to create a Better Buying “score.” The aggregate ratings will be released to buyers, and eventually, the aggregate ratings and scores will also be released to the public.

Better Buying also opens up a dialogue between buyers and suppliers about potential solutions to the problems suppliers face that prevent them from meeting codes of conduct. How can they dialogue if it is anonymous? Both buyers and suppliers will share ideas and strategize about how to make improvements in online chat rooms. There is a reason why the Better Buying platform is anonymous: “Suppliers are reluctant to bite the hand that feeds them,” Cahn said. “The notion of having an anonymous rating system is to allow suppliers to rate buyers.”

Why aren't codes of conducts enough to solve the labor and working-conditions problems that exist? A report by the Clean Clothes Campaign provides answers: Even if companies adopt codes of conducts reflecting good standards, the overall impact on improving labor standards is “often fairly limited," the campaign found. The report goes on to identify one “underlying reason” why this happens: The purchasing practices commonly found in the athletic footwear and apparel sectors “have not been adequately amended to enable one to make the labor rights strategies effective.”

The Clean Clothes Campaign identifies structural characteristics that undermine compliance with codes of conduct, and one of them is an unstable relationship between buyers and suppliers. As You Sow, a nonprofit that promotes corporate responsibility through shareholder advocacy and legal strategy, confirmed these findings in another report: Many codes of conduct violations in the apparel industry can be traced back to corporate purchasing practices, the group found, also citing unstable relationships as having a big impact on compliance.

The fact that codes of conduct in and of themselves can’t prevent labor abuses highlights the importance of dialogue been buyers and suppliers to improve purchasing practices. Cahn describes the relationship between the two as a chain. “There’s a relationship between buyers and suppliers," he stated simply. And what Better Buying creates is a "more open dialogue despite the anonymity," he continued. "It opens the doors to buyers to think creatively with suppliers by having open dialogue in ways that can improve conditions for workers.”

Better Buying has the exhaustive research behind itself to actually improve relationships between suppliers and buyers. Last summer, Cahn and his partner did an “exhaustive study on knowledge that existed on sourcing practices,” he explained. They looked at the purchasing practices that harm workers and what makes a good rating system. Then, this fall and this January, they traveled to several countries including Cambodia, China, Hong Kong, Bangadesh and Vietnam to interview suppliers and workers. They used the information they gathered during  their travels to measure what impacts both suppliers and workers.

The last step they took was talking to a wide variety of stakeholders to determine how the Better Buying system would work. Last week, they conducted a multi-stakeholder workshop in Geneva and received “good feedback,” Cahn said. “The next step this summer is to go through a beta test.” That beta test will test the methodology Better Buying will use to input and score data.

Image credit: Flickr/marc oh!