An eight-story building which was home to several garment factories collapsed in Bangladesh last week, killing at least 87 people, and bringing back memories of the devastating factory fire from last November. Within the building were garment factories that supplied clothing to well-known brands including, Benetton, Primark and Matalan.
Bangladesh has about 4,500 garment factories, but recent events have raised questions regarding how much control brands actually have over their supply chains for products manufactured in Bangladesh.
More and more companies are addressing this issue within supplier contracts – expanding beyond the typical quantitative metrics like lead time and production volume. Contracts are now starting to include:
· Stricter ethical and safety standards
· The inclusion of local and SME tier-2 suppliers
· Government reporting and environmental standards
· The elimination of unauthorized subcontracting
This new approach to contracts supports broader business philosophies and is a step in the right direction for social responsibility. By helping to protect the safety of their workers, businesses are also safeguarding themselves against consumer backlash and most importantly, unfortunate tragedies.
What else are you now including in contracts as safeguards? Are contracts becoming a wider discussion – beyond procurement?