WhichPLM Blog 23 Jan, 2009: Ethical trading does make financial sense!

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Today it’s critical for any business to have a Corporate Social Responsibility (CSR) strategy, not least because of legal requirements, that it attracts investment from shareholders (or discourages investment when things go wrong!), or because customers increasingly care about where and how their clothes are made. The bottom line is that smart organisations are run by smart individuals who understand the need to protect the people that work for them, whether they are an employee working in the design or technical departments or off-shore at a supplier. Maintaining a good public image of ‘looking after your people’ heavily influences employees as well as consumers. Innocent Smoothies, Seasalt and People Tree all maintain a ‘healthy’ public image when it comes to looking after their people and reducing their impact on the environment and this clearly influences a consumer’s purchasing decision.

Ignorance is not bliss!

Only last week we saw some bad press in the UK linked to Associated British Foods-owned Primark and their use of illegal labour at a Manchester-based supplier: Primark faces inquiry over use of illegal labour (Source: www.teleg... One of the problems always highlighted by these reports is the lack of information apparently available to the retailer. ‘We didn’t know,’ or ‘We’re not responsible!’ The fact is that when news like this is published, it doesn’t matter whether the workers are directly or indirectly employed by the retailer or not, because bad press will always affect the credibility of the brand.

Smart companies thrive on the availability of information and, although total control of the supply chain maybe impossible, investment in technology is a step in the right direction.

So how can PLM help?

On the positive side let’s assume that you have a CSR policy, but do you have a strategy to communicate your Code of Conduct (and your compliance to it) to every member of your business and the extended supply chain on a regular basis? Because one of the major benefits of PLM is the structuring of communications, you can implement your Code of Conduct into the design and product development stages within your PLM solution. All suppliers can see the code (and any updates) in one place and you are providing transparency to third party companies, such as auditors, who can log into the system to complete their audits. PLM is also very good at providing visibility of information in an attempt to avoid ‘risks’ to the business that could be identified and dealt with at a much earlier time to prevent any harm to your brand.

Visibility of technical compliance with Product Lifecycle Management (PLM)

Another real bonus for the buyer and supplier is that PLM can also share a supplier’s Technical Compliance, enabling better understanding for buyers of a supplier’s capabilities that can be updated by the suppliers and again audited, if required, by third party organisations. There are PLM systems that already exist on the market to manage Social and Technical Compliance, as well as documenting and auditing adherence to a Code of Conduct, but because of consumer demand for more awareness of how and where their clothes are made, expect other PLM systems to also have this functionality in the near future with more focus on social and environmental ethics.

Like I said above, an ethical trading strategy is one of the most important business initiatives an organisation can undertake and needs to be communicated and implemented throughout the organisation with care. A few words and no action is no good to anyone and certainly won’t maintain faith in your brand from employees or consumers. PLM is an enabling technology that can help to communicate and implement these ‘values’ into everyday working life, but at the end of the day, it’s the leaders that need to walk the talk or face the negative consequences when things go wrong.

Mark

Mark Harrop is a leading Apparel PLM expert with more than 34 years experience in the industry. Mark co-founded the Product Development Partnership Ltd, the team of experts behind WhichPLM.