You’ve placed an order at a factory: your brand demands 25.000 of printed T-shirts. As fast as possible, please. The factory manager doesn’t complain and delivers in time. Remarkable, because there weren’t that many workers in the factory when you visited, right?
If you’re visiting a factory as a buyer or a designer and you find the amount of workers is not consistent with the production, take action. Although you don’t want to cause disruption, especially since your products have been perfectly delivered in time, you do want good labour conditions for the workers involved.
Subcontracting + overtime
The way brands do business has an enormous impact on factory conditions. Last-minute changes in design, compensating for peak seasons, and cost savings all affect the factory’s ability to deliver quality on schedule. And factories do everything they can to avoid late shipments as they don’t want to lose their customer, neither do they want to offer a costly discount or even to ship goods by air at their own expense.
These are just a few examples of how subcontracting and excessive overtime became common practice in the garment industry. Factories feel they have no other option then to do overtime or subcontract.
One of the issues with subcontracting is that it is often unmonitored. Many brands are not aware of the exact locations of their subcontractors. And if you don’t know that, you’re open to all kinds of risks. Unmonitored subcontracting complicates the implementation of the Code of Conduct. When something goes wrong at a factory, it is often difficult to clearly assign responsibility. Many subcontractors are small factories and are not able to meet the brand’s Code of Conduct for fire and building safety for example.
Reality check: What can you do?
The best way to gain transparency is to have your own people in the manufacturing countries. However, this is not always easy to arrange, especially for small brands this is unrealistic.
If you visit the workplace, make sure you’re well informed about: how many lines are producing for your brand, what is the daily output, when are they going to finish the production, how much of the fabric is ready, how much of the cutting is done? If you have all the details, you can draw your own conclusions about the capacity of the factory and the likelihood that your order is entirely produced in that specific factory.
If processes are missing that are needed for your production – for example like washings, embroidery or printing – it could indicate these stages of production are subcontracted.
Ways to prevent this from happening
Create a realistic production calendar
Plan well and realistically, so factories won’t need subcontracting. Go for ‘collaborative planning’: share your business calendar with the factory and the factory shares detailed dates such as fabric arrival, cutting, sewing dates etc.
Reduce the pressure on the factory. Avoid tight shipping dates by limiting the chance of last minute style changes. Give an early notice to your supplier or compensate for the additional costs. Require prior notification before any goods are subcontracted so you can check the subcontractors for quality and compliance with your Code of Conduct.
Invest in long term relationships with your suppliers
Don’t change suppliers too often. Long term relations between suppliers and retailers sends a signal to suppliers that the brand is investing in them and will still be there next season. When there is mutual trust, the factory manager might be honest about the need for subcontracting when it arises. You then have the opportunity to visit the location and start remediation when needed.
Think about pricing
Choose fair pricing that a factory can realistically meet without subcontracting. Try to work with an open calculation system. Often designers and developers choose materials and/ or manufacturing technologies they like, but without thinking about the market price. As a result, sourcing people squeeze the factory for prices to fulfill their margin targets. Surely by that time it’s too late to change the material or manufacturing process; the marketing campaign, photo shootings etc. are well underway.
It’s very important that the supplying factory is transparent. Subcontracting itself is not bad, if done in a planned manner. Subcontractors can be compliant factories.