Close working relationships with suppliers are essential in today’s fast-paced industry, said delegates at a recent Drapers roundtable
- Supply chains are increasingly complex, with more players involved around the world
- Communication is essential but can be difficult with second- and third-tier suppliers
- Retailers face new challenges with quicker and more flexible sourcing
- Consumers are more aware of sourcing and ask more questionsProvenance can be part of a story, but must be authentic
Global supply chains are facing increasing scrutiny from consumers and the media, at a time when retailers are challenged with new demands for faster and more flexible production. The best strategy for handling these issues, while ensuring that quality and margins are maintained, was the subject of debate at Drapers’ latest roundtable on June 14.
Most retailers have long-lasting relationships with their supply base, built on years of trust, but sometimes it can be necessary to bring on new suppliers to scale up, meet new trends or avert a break in production.
Drapers, in association with software company Segura, which specialises in “supply chain clarity”, invited sourcing, compliance and operations experts from retailers including Shop Direct, M&Co, Jigsaw and Superdry to London’s Bloomsbury Hotel to discuss sourcing relationships in 2016 and key directions for the future.
Premium retailer Jigsaw’s supply base is broadly stable, chief operating officer Richard Gilmore reported, and that means the team can spend more time with the individual factories and establish better relationships. “Over the last five years, we have really tried to elevate that level of understanding,” he said, citing one supplier of cashmere in Mongolia, who uses a letter of credit to ensure that he can pay farmers in cash,” he said.
“That level of relationship is really important, but predominantly we have invested in long-term partnerships because we think it important, and the quality is great as a result of that.”
Scott Roberston, head of business transformation at Superdry, maintained that it was important to work closely with suppliers so they could work out any problems together.
“One of the biggest challenges we have had is our peaking workload. So we have worked very hard with our supply base on the prioritisation of orders so we can get the products when we need them,” he said.
Value retailer M&Co prides itself on working with good, ethically compliant factories in countries including Bangladesh, India and China, some of which it has been working with for more than 30 years. Jane Coppen, head of sourcing and quality at M&Co, said: “I’m proud that we can source ethically from Bangladesh, and it is something we are very transparent about.”
Bringing on a new supplier, she said, was a process whereby they would visit each other and an audit would be carried out by a third party. “But that is only a snapshot of one day, so we want a close relationship on top of that,” she said.
Gilmore agreed: “Everyone goes through Sedex accreditation, but that’s pretty much the basic minimum you’d expect from anyone. It is only really a starting point, and after that it’s everyone’s responsibility.”
Hash Ladha, chief operating officer at Oasis and Warehouse, explained that the company had had a Hong Kong sourcing office for the past 20 years, but that good relationships and regular communication from the UK-based team were also necessary because of the scale of the business.
“We are relatively small, so we have to have good relationships in order to maintain the supply chain, compared with larger retailers who place bigger orders,” he said. “Our teams go out several times a year, even though we have the sourcing office, and they work on the collection together.”
He described suppliers as a vital part of the operation, so maintaining an “everyday working relationship” was essential. “We couldn’t do our jobs without them, so we treat them with as much respect as we would our customers,” he said.
Jigsaw often finds that short visits to suppliers, particularly in Europe, can be a much more effective way to communicate than email or phone calls, with a better end result. “It makes a huge difference, and getting on a flight to Portugal and staying overnight is no more expensive than the courier costs of pushing samples back and forth for a couple of weeks, trying to get something right,” said Gilmore.
“I’ve actually seen my production director get on a sewing machine and make something at a factory to explain how to do it. Skype can help, undoubtedly, but it is regular dialogue with the factory on the factory floor that seems to be making a real difference for us.”
Laura Rourke, head of product compliance at Shop Direct, believes that the public are becoming more aware of retailers’ supply chains and asking more questions about ethical compliance. She said the company was investing more resources into it.
“We are seeing more comments coming through on our websites, and there are a lot more NGOs [non-governmental organisations] and campaign groups,” she said. “I don’t know if [ethical compliance] is consumer-driven – it’s just the right thing to do.
“We have a set of company values and we just want to be with suppliers who share those values, and who will treat you well and treat their people well. Generally, if you find that you are with a factory that is ethically sound and can prove itself to be ethically sound, the quality of its products will be sound as well.”
Luca Marini, co-founder and chief operating officer of online womenswear retailer Finery, said he was amazed by how much his customer valued provenance. Where products came from was the second most common question people asked, he said.
“We had a really great reaction when we added ‘Made in Italy’ to the relevant products or when we have a range made in Britain and a video of the factory – people do care about this stuff,” he said.
Gilmore agreed, explaining that the more information and details Jigsaw provided on where products or fabrics were made, the more customers wanted.
But, despite growing interest from consumers and a desire from many retailers, complete transparency in the global fashion supply chain is not that straightforward, particularly when encompassing second- or third-tier suppliers.
“The challenge is there when it is a big network,” said Simon Green, enterprise account executive at Segura. “It’s all well and good when you have 10 or 50 factories, but when it’s 3,000 it is much more difficult.”
Robertson said: “When you go out there regularly, you can say, ‘Tell me or show me,’ to become satisfied with how those [secondary] relationships work. The more you work with a factory, the better that trust is.”
“I think the reason a lot of manufacturers don’t come out and give a positive message on ethical sourcing is that none of us are in control of 100% of our supply chain, although we have the very best intentions,” said Ladha.
Kosten Metreweli, chief marketing officer at Segura, added: “It’s a journey, and the reality is that every single brand that outsources manufacturing has this problem and, especially if you use thousands of factories, you almost certainly have an element of risk at some point.”
Drapers asks: How do you ensure good communication with suppliers?
Hash Ladha, chief operating officer, Oasis and Warehouse
“Our teams visit suppliers several times a year, even though we have an overseas sourcing office and they work on the collection together.”
Richard Gilmore, chief operating officer, Jigsaw
”Our supply chain doesn’t move that much, and we trust them. We’ve had a long relationship with suppliers, so we can spend more time with them.”
Scott Robertson, head of business transformation, Superdry
”We work closely, because it means we can work out any problems together. One of the biggest challenges we have had is our peaking workload, so we have worked very hard on prioritising orders.”
Jane Coppen, head of sourcing and quality, M&Co
“We don’t have offices in countries, but we like to think that we know our suppliers very well. It is about understanding people and taking the time to go and work with them face to face.”
Laura Rourke, head of product compliance, Shop Direct
“We have our own sourcing offices in Asia and quality controllers, who go into the factories to check the product. However, we buy from lots of sources, so it’s how you best use those people on the ground for true transparency.”
Luca Marini, co-founder and chief operating officer, Finery
”As a relatively new brand, we are at a completely different stage from some of the others. Our supply base is built on suppliers that [brand director] Caren [Downie] has worked with before.”