As supply chain collaborations and collective organisations multiply, what are the ingredients for success? What are the dangers from 'collaboration fatigue'? Taken from Innovation Forum's new Supply Chain Risk & Innovation publication, published ten times a year on a subscription basis. The publication brings together concise, practical insight into global supply chains. Required reading for senior management, buyers, business sustainability professionals and all who advise them, Supply Chain Risk & Innovation distils all the myriad information, data, research and comment, presented it in a clear, analytical format. Find out more here: http://innovation-forum.co.uk/supply-chain-risk-innovation.php

1. PAGE 22
Collaboration is becoming a vital component
of long-term business success. And nowhere
is this more apparent than in global supply
chains. Big companies are scrutinised
with supply chain crises catapulted into
the headlines and stakeholder concerns
continually intensifying.
However, without full visibility or direct
influence over complex, multi-tiered chains,
the immense challenge of securing ongoing
supplies – while protecting workers, reducing
environmental impacts and preventing further
resource depletion (and escalating material
costs) – remain.
In this context, competitors are
increasingly working alongside each other
and their stakeholders through collaborative
movements.
These can take different forms, of course.
Leading companies work together to develop a
new initiative that can become an organisation
in its own right. Or publicly-shamed corporate
giants are now in conversation with the very
activists who brought their ill-judged activity to
the world’s attention.
Underlying all this is the fundamental
realisation that the social and environmental
challenges at hand, often systemic and
interrelated in nature, are simply too great for
any one company to tackle alone. This may
seem simple enough, but it is still a significant
ideological leap that many big companies
struggle to make.
Clearly there’s an opportunity to identify
common solutions and take them to scale.
But as supply chain collaborations multiply,
is there a danger of "collaboration fatigue"?
How can multi-brand and multi-stakeholder
initiatives thrive and how can businesses
support suppliers in meeting diverse
requirements?
Collaboration’s rise and rise
What started with the Ethical Trading
Initiative’s (ETI’s) visionary move to assemble
multiple stakeholders to protect workers’
rights back in 1998, has gathered momentum
as the complexity of the issues has deepened
and companies’ supply chain footprints have
become clearer.
There has been a flurry of collaborations
in recent years, encompassing cross-sector
movements (Consumer Goods Forum,
AIM-Progress), sector-specific initiatives
(Zero Discharge of Hazardous Chemicals
(ZDHC), Better Cotton Initiative, Tea 2030,
Electronic Industry Citizenship Coalition)
and country-focused initiatives (Bangladesh
Accord, Courtauld Agreement).
Big group collaborations may take on
a convening or enabling role, such as the
ETI, they might be focused on raising the
bar through standard-setting, or overtly
"implementation focused", such as Impactt’s
Benefits for Business and Workers programme
or the ILO’s Better Work initiative.
Others provide a service, such as
platforms for sharing tools or data – Global
Social Compliance Programme (GSCP),
Business Social Compliance Initiative (BSCI),
Supplier Ethical Data Exchange (Sedex) and
the Sustainable Apparel Coalition.
While the initiative may be the result
of far-sighted companies’ efforts to lay the
groundwork, the outrage surrounding supply
chain crises often sparks decisive action
among a far wider group, galvanising many
parties around a shared concern.
SUPPLY CHAIN COLLABORATION
Collectiveactiononsustainability.Canitwork?
As supply chain collaborations and collective organisations multiply, what are the ingredients for success?
What are the dangers from ‘collaboration fatigue’?
Essential insight
• Business recognises that collaboration is
vital for long-term success.
• Success is tough. It takes time to build
agreement, even if there’s shared vision.
• Good examples of agreement: the
Consumer Goods Forum, AIM-Progress,
the Better Cotton Initiative, Tea 2030
and the Bangladesh Accord.
• Practical elements – such as an unbiased
secretariat and funding – are crucial.
• Too many collaborations and suppliers will
get tired and confused.
• Demonstrate that collaborations work and
get results. Impactt’s Benefits for Business
and Workers programme has 41 factories
in Bangladesh involved, making savings of
$5.85m in two years, with pay increasing
6% for 83,000 workers.
ACT is backed by 15 brands,
including H&M, Arcadia, Tesco
and Primark.
Its aim is to improve wages
across the garment sector by
establishing industry collective
bargaining in key sourcing
countries.
The outrage surrounding
supply chain crises often sparks
decisive action, galvanising
parties around a shared concern.
The flurry of collaborations
encompasses cross-sector
movements, sector-specific
and country-focused
initiatives.
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2. PAGE 23
transparent and open to change as they move
forward. This is a tough process and there’s no
easy way round it.
Importantly, it requires patience, and
the ability to listen and take things step by
step, according to Maritha Lorentzon, social
sustainability lead at the fast-fashion brand
H&M. She cites the example of Action,
Collaboration and Transformation (ACT), a
new initiative to create a fair living wage for
garment workers in developing countries.
A group of brands initially convened to
develop a set of enabling principles, gradually
building momentum by inviting all relevant
parties to the table. Together, they have come
up with a shared vision to help empower
workers while improving manufacturing
standards and responsible purchasing
practices. "It has triggered a positive dialogue
that’s vital for the industry," says Lorentzon
"Ultimately, we all want the same thing."
The path to success
Building a successful collaboration starts with
analysing the need that exists, clarifying the
purpose, and convening relevant partners.
Together, the partners must ensure they
develop a full understanding of the context
and define the scope of their work.
Importantly, they must decide from the
outset how the project can be scaled, Smith
points out, in order to avoid scalability issues
further down the line.
Practical issues such as a solid, unbiased
secretariat – when the collaboration
requires a formal organisation structure
– and sustainable sources of funding are
important considerations, Hurst believes. An
inspirational steering group can help to keep
everyone moving in the same direction.
With a shared vision or set of principles in
place, the group can begin to create strategies
and take collective action, remaining flexible,
Barriers to progress
"It’s important to consider whether a small,
fleet-footed group should risk taking the lead
without knowing if others will follow, or if a
large group should move en masse, possibly
buckling under its own weight," says Rosey
Hurst, director of ethical trade consultancy
Impactt. "And when there are different priorities
and agendas in the room and participants range
from the conservative to the radical, building a
concrete agreement takes time, even if there’s a
shared vision."
Indeed, while involving multiple
stakeholders can accelerate progress, the
journey is often challenging, according to Sally
Uren, chief executive of Forum for the Future,
which runs the Tea 2030 programme for a
number of the big tea companies. "It’s really
hard work," she says. "The closer you get to
shifting a system, the harder it pushes back. The
biggest barriers are often short-term thinking
and vested interests."
Finding a balance between addressing
the diverse issues and avoiding duplication
is also becoming harder as the number of
collaborations grows. "When the going gets
tough, businesses in particular have tended to
create new collaborations rather than making
the existing ones work harder," says Uren.
Suppliers, too, are finding it hard to keep
up with the requirements of multiple initiatives,
particularly when it comes to standards and
certifications, leading to what some see as
collaboration fatigue.
"Duplication is a big issue for suppliers,"
says Tom Smith, director of strategy and
planning at Sedex, which works with companies
to help them drive improvements in responsible
and ethical business practices in their global
supply chains. "In the same way that suppliers
were facing audit fatigue, there’s now duplicated
training and capacity building initiatives.
They often look to us to help cut through the
confusion, clarify what the collaboration stands
for, who the key players are and if it’s likely to be
around for the long term."
Fast fashion and fair wages not incompatible
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3. PAGE 24
chain thinking to consider how they can use
power and influence to create positive change,"
he says. "Taking steps such as striking certain
suppliers from their supply base is simply not
enough. "In order to make a real difference,
they’ve got to ask how they can become
advocates for systemic change on key issues."
One collaboration perceived as
game-changing is the Bangladesh Accord.
Forged in the wake of the Rana Plaza factory
collapse, which killed more than 1,100
garment workers, it has seen 190 brands
commit to improving building safety via a
legally binding agreement. Trade unions and
NGOs have an equal voice at the table, and
although there are criticisms surrounding the
rate of progress on remediation, the structural
and fire safety changes are starting to make
a difference. Spanning 1,600 factories and
touching two million workers, the work in
progress is intended to support worker health
and safety for the long term.
Communicating with suppliers
While partnership approaches between
brands and suppliers are really starting to
bear fruit, a lot of work is still happening in
isolation, according to Smith. As the spirit
of collaboration grows, there’s an important
opportunity to bring this all together.
AIM-PROGRESS has organised a
series of events in this vein, including in
Committing to systemic change
For a collaboration to truly be successful, a
commitment to real, systemic change is vital.
"You really need to set out to change the
world," says Hurst. This perspective is echoed
by Phil Aikman of Greenpeace, who leads the
campaigning group’s engagement with pulp
and paper giant Asia Pulp & Paper. All too
often, he believes, corporate discussions centre
on removing risk from the supply chain and
protecting brand reputation.
"Companies need to move beyond supply
BANGLADESH ACCORD:
Legally-binding agreement
between brands and trade
unions to improve health and
safety across the country’s
garment sector.
Involves 190 brands and
two million workers.
1,300 factories have been
inspected.
Shanghai, where brands presented as a group
to suppliers. The GSCP, facilitated by the
Consumer Goods Forum, is also helping
major retailers and brands to strive towards a
harmonised, global approach for sustainable
supply chains, providing both individual
companies and collaborative initiatives with
best practice information and "open source"
supply chain management reference tools.
"We help set the stage for companies to
collaborate," says Didier Bergeret from the
GSCP. "Paving the way to convergence is vital
to driving positive social and environmental
change in the supply chain. Drawing inspiration
from the tools we provide frees companies up to
focus on what’s really important."
For example, the ZDHC initiative
(which has recently published a landmark
manufacturing restricted substances list)
tailored GSCP methodologies to its needs,
saving cost and time, and accelerated its
journey towards action. Also, brands can
take advantage of collaborative platforms and
databases to identify issues as a group.
Using the Sedex database, for example,
it’s possible to identify the top ten issues for
suppliers in a particular sector. Equipped
with this information, Smith says, brands
could approach suppliers as one unified force,
ensuring clarity of message and requirements.
The ITC Standards Map also offers robust
help here, as a highly pragmatic tool to
pinpoint the differences between multiple
sustainability standards, codes of conduct and
audit protocols.
Rana Plaza shocked 190 brands into commitments
GLOBAL SOCIAL
COMPLIANCE PROGRAMME
Consisting of a giant library
of reference documents for
400 member companies in
70 countries.
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4. PAGE 25
Demonstrating concrete results
Everyone wants to see the results of initiatives,
and sometimes the results can’t come fast
enough. However, where initiatives are able to
prove concrete results, they are steadily scaling
up as more brands and suppliers realise the
business benefits. For example, Impactt’s
Benefits for Business and Workers programme
has now attracted 16 brands and 185 factories
in Bangladesh, Myanmar and India by proving
that improving pay and labour conditions is
directly linked to increased staff retention,
productivity and profit.
By participating in the training, 41
factories in Bangladesh made $5.85m in
savings in just two years, while their 83,000
workers saw a pay increase of more than 6%.
Elsewhere, the Better Cotton Initiative
has ambitious plans for 30% of the world’s
cotton production to be made in line with
the BCI standard by 2020. Supported by 500
companies, including H&M, Nike and Ikea, it
unites people across the cotton supply chain in
a collective effort to cultivate cotton in a way
that respects the environment, boosts farmers’
incomes and strengthens the industry. It has
already reached one million farmers in 20
countries, and is targeting 11.5% BCI cotton
production in 2015. BCI farmers in Pakistan
increased their use of organic fertilisers by
85% in 2013 (compared to farmers not using
BCI techniques), expanded their yields by
15% and saw profit increases of up to 42%.
Is accelerating progress possible?
It seems that by their very nature,
collaborations can move slowly. That said, all
parties agree that, in the long term, they stand
to deliver greater impact. As Lorentzon puts it:
"If you want to run fast, you go alone, but the
impact is not the same. We need high quality,
sustainable solutions and long-term thinking."
The quality of the work achieved is
steadily improving. Collaborations such as
the Bangladesh Accord are raising the bar
for future initiatives, Hurst believes, and the
group of leading companies learning how to
do this right is growing all the time.
Harmonising collaborative efforts will
grow in importance as collaborations evolve
and new collaborations emerge, and will
help to reduce the burden on suppliers,
accelerating progress.
Knowledge-sharing will also continue
to be important, both within the private
sector and across whole systems. H&M is
starting to share the lessons from its social
dialogue initiative (which aims to have
democratically elected worker representation
in all the company’s factories by 2018) with
other brands, for example. Meanwhile, the
G7 made responsible supply chains a key
focus for discussion at its recent conference
in Germany, further building the case for
optimism, Bergeret believes.
So, while there is still much to be done,
more companies are collaborating towards
shared goals, exploring radical new business
models and considering how to achieve
systemic change. They are applying passion,
intelligence and knowledge to addressing
major social and environmental challenges
in global supply chains. ★
BCIbringstogetherfarmers,
ginners,traders,spinners,
mills,manufacturers,retailers
andbrandstodefineand
supporttheimplementation
ofmoresustainablewaysof
producingcotton.
BETTER COTTON INITIATIVE SUPPORTED BY:
reaching one million farmers
in 20 countries
500COMPANIES
SUPPLY CHAINS IN FOCUSSUPPLY CHAIN RISK & INNOVATION