Does “fast fashion” create safety problems for employees at global supplier factories ?

An article in Bloombergbusinessweek (February 7,2013) suggests that the fast (even two week) fashion cycles at Zara, Hennes & Mauritz (H&M) create stress on suppliers in Bangladesh who need to respond rapidly or lose the business. The corresponding stress shifts to employees and, the article alleges, creates conditions that compromise safety – leading to deaths due to fires. The article claims that a 10 cent extra cost per garment can improve safety if spent on fire prevention and worker protection efforts. But will such a price increase offered to manufacturers be spent appropriately on safety ? Have retailers gone too far in their focus on matching trends and should the safety consequences be rejected by consumers ? How can consumers be educated about the tradeoff ? Should regulators at retail locations demand that retailers accept global responsibility for the consequences of their “fast fashion” supply chain choices ?

About aviyer2010

Professor
This entry was posted in Global Contexts, Operations Management, Supply Chain Issues and tagged , , , , , , . Bookmark the permalink.

3 Responses to Does “fast fashion” create safety problems for employees at global supplier factories ?

  1. Praveena says:

    ‘Fast fashion’ or ‘Quick response’ in the goal of delivering quick fashion in the fastest time and in a cost efficient manner (high demand for constant product turns), seems to have many hidden costs that cannot be ignored.
    This business model aggressively pushes subcontracted factories that already have the leanest production costs to further lower prices in order to keep their contracts. Factories are forced to side lay costs related to environmental safety or long-term employee well-being in order match their production schedule with the demand.
    In addition to the safety hazards of the garments factories (fire, electrical outlets, lighting, number of exits, hygiene standards), this model also increases overtime of factory employees due to continuous, frequent demand for style changes or too many styles per design. This increases their setup times per batch and has a bullwhip effect as a consequence of which laborers have to work overtime to meet the schedule.
    These are the hidden costs of providing the widest variety of fashion possible, at the lowest cost, to a customer base that ‘doesn’t want to wait’ by suppliers who are ‘just’ responding to customer demand.
    One of the ways to ensure safe working conditions for laborers is to have ILR or other governing bodies enforce policies on the subcontractors such that safety standards and laborer working conditions as per standard are the minimum required (could vary according to the economic and social conditions of the country) to run the factory. I do not see that a price increase offered to subcontractors would be spend appropriately on increasing the safety standards unless it is enforced. The enforcement has to be on the subcontractors’ side. This will automatically have a push-back effect on the retailers.
    In addition to this, regulators at the retail locations can demand that retailers accept global responsibility for the consequences of their “fast fashion” supply chain choices. This will control their aggressiveness in pushing down the manufacturing costs of the subcontractors.
    Both the above would help improve conditions for laborers but the key enforcement as discussed above should be on the subcontractors’ side.
    One way consumers can be educated on the ‘trade offs’ of their low cost, fashion wear is by retailers / subcontractors including a small tag together with the price tag on the garment, that subtly but effectively conveys the hidden costs to the buyer.

  2. Nachiketa Mohanty says:

    A supplier merely responds to the requirements of the retailers as per the terms of the contract. In a situation where the suppliers are having to forsake safety standards in their premises due to the pressure of fast response and innumerable product variants, further pressure on them through regulations will make the matter worse. Moreover, labor laws vary for different countries and hence, it wont be easy to create a standardized regulation to ensure suppliers meet the morality norms and expectations of customers in another country altogether. Moreover, I feel that any price increase offered to manufacturers would not be spent appropriately on safety as they have no incentive to do that. And neither is there a deterrent to prevent lower focus on safety. It is critical to remember that this situation has arisen because of the pressure retailers put on these suppliers to meet the production and delivery schedule. In such a situation, I feel that retailers should be made to accept global responsibility of their “fast fashion” choices. This would result in the retailers themselves ensuring minimum safety standards in their suppliers’ premises. Since the retailers are the business drivers for the suppliers, there would be no alternative for the suppliers but to accede to the demands of safe practices by the retailers. Only after this global responsibility is put on the retailers can we go for additional measures to ensure safety, e.g. regulations on the suppliers.

  3. Prasant Goel says:

    On 24th April 2013, an eight-story building “Rana Plaza” in the Savar Area outside Dhaka with over 5 garment factories collapsed, killing close to 1,100 people. It supplied clothes to the most well-known brands in the US and Europe. In Another Incident, 112 garment workers died in a fire incident at The Tazreen Fashion Factory in Bangladesh. The country is the second largest garment exporter in the world after China but little has been done for the worker safety although everybody including the Bangladesh Government, the factory owners, the foreign retailers and many other stakeholders have been prospering through this business model. One of the major concerns was the lack of any trade unions to protect the rights of the workers against the suppressing factory owners.
    However there has been some improvement since the Rana Plaza incident, The government inspectors along with ILO and EU have been overseeing close to 1500 factories in Bangladesh for safety norm implementation. Moreover, separate inspection by 175 retailers in Europe an 26 in the US through an accord on Fire and Building Safety is also being carried out. But the fact remains, as to how effective are these efforts? In many cases, the inspectors hired by international brands would ask the owner to put the safety improvement but never followed for remedial measures as per the account by the local workers. Thus the challenge lies in implementing these measures successfully. In one such serious efforts towards setting the norms right in Bangladesh factories, was the cancellation of the order by several brands from the Azim group in 2014 for enforcing anti-union activities in the factories. Later the unions were recognized and the compensation was paid to the union leaders. As a stepping stone to resolving these issues, the Bangladesh government is in the process to revise its laws in line with ILO ‘s conventions. With the norms in place, the sourcing companies need to institute inspection to ensure that factories comply with companies code of conduct as per the Labor Laws of Bangladesh and the ILO’s convention ratified by Bangladesh. Secondly The sourcing companies need to ensure that the contracts have room for incorporation of cost of labor, health and safety compliance and further carry out inspection for its implementation through a consortium of Brands operating in the US and Europe to establish safer operations in the factories in Bangladesh, avoiding any future incident like Tazreen factory or Rana Plaza. These incidents not only impacts the Business in Europe the US but also destabilized the economy of Bangladesh which is heavily dependent on the garment exports. Thus it is in favor of all the stakeholders to set the right safety and working condition norms for maintaining a sustainable supply chain of garment sourcing in Bangladesh and beyond.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s