Supply chain management in times of COVID-19: How do we support and monitor our supply chains in 2020?

Major disruptions like COVID-19 put global supply chains at risk. During such challenging times, partnership is more important than ever. We believe that long-term partnership is the key to strengthen business relations. Nowadays more than ever. That is why we take our responsibility seriously and expect the same from our business partners.

Responsible purchasing practices in times of supply chain disruption 

We have added a clause in our General Buying Conditions in which we clearly commit to generally continue with due diligence and responsible purchasing practices even in times of crisis, as much as possible. This involves

  • not cancelling/withdrawing orders
  • not paying less or asking for discount on produced orders
  • and not asking for reduced price taking advantages of the situation.

Further it is important for us to regularly communicate with our local business partners, especially producers to understand the challenges they are facing and how supply chains and production are affected by that. Therefore, we ask our business partners to consider related guidelines recommended by the Brands Fashion headquarter or assigned partners. Without any exception we expect that necessary measures are implemented to keep the people working in supply chains producing for Brands Fashion as safe as possible. We ask our direct business partners and top leverage suppliers to provide information on the current situation and any actions taken in the Brands Fashion involved supply chains regularly.

 

Guidelines and support

We have provided different kind of guidelines to our suppliers and encouraged them to implement recommended health & safety measures. Those shared guidelines were set up by various stakeholders like the Bangladesh Accord and Building and Fire Safety, Better Work, the Fair Labor Association or Fairtrade International. We used them as a basis for setting up our own checklist reflecting recommended actions that our factories should take.

Also, we informed our business partners about different kind of webinars taking place addressing how to take necessary actions in times of COVID-19, e.g. how to deal with disease management systems, infection chains in factories and re-opening facilities after lockdown.

 

COVID-19-Update from business partners of Brands Fashion

We ask our suppliers to provide general information on how they deal with OHS regulation and protection of workers and if they need any support from us with implementing measures. In relation to our own risk analysis we ask if any risks emerge or worsen due to COVID-19. Also, we investigate if the number and kind of complaints have increased/changed. If any disruption of order flow has taken place, we want to know if it was caused by us to make sure to maintain the responsible purchasing practices we committed to. In case the booked capacities have changed, we still expect the factories to ensure a continued payment of wages.

Feedback from suppliers: established systems and current challenges

Suppliers confirm and demonstrate measures such as social distancing, the provision of sufficient facilities for hand washing, temperature control, wearing of masks, disinfection facilities, compliance with guidelines and regular training and sensitization of employees. We also ask for the process how a COVID-19-case of illness is or would be dealt with. In Bangladesh and Turkey, we have received reports of cases of illness in the factories and factories explained which actions (usually prescribed by the government) were taken in such situation.

When asking for new or increased existing risks, where it could be thought of discrimination of infected workers or the restriction of worker rights, most suppliers „only“ refer to an increased consumption of water, disinfectants and masks and therefore of course an increase in waste production.

What we did observe is that in Bangladesh we have received more complaints through the Bangladesh Accord and Building and Fire Safety. Those were mainly about unpaid wages or dismissals which then have been investigated by our local compliance team.

Many factories, particularly in Bangladesh, are receiving fewer orders or have not accepted goods already produced by branded companies. So far, however, there has been no indication from suppliers that we have cancelled orders or otherwise had a negative impact on the order situation. Despite the tense economic situation, we want to ensure that workers continue to be paid according to legal requirements. Our local Compliance Team in Bangladesh is checking relevant documents and conducting interviews accordingly to make sure salaries are paid correctly. Fortunately, we are currently receiving feedback from China, Turkey and Pakistan that the order situation is stabilizing again.