Social Accountability in Garments Industry
Dept of Fashion Design & Arts
Hindustan University, Chennai, India
Even after a decade of code of conduct programme by buyers, garment factories continue to perceive social accountability as a cost. It is not considered an investment. As a result, factories continue to miss business benefits of social accountability. Nowadays, social accountability has become an increasingly important tool for the importing countries to motivate the suppliers to maintain a high level of social and environmental performance. The main purpose of social accountability in garments industry is to ensure that business partners abide by regional laws as well as comply with the company’s commitment to social responsibility.
If garments industry want to make social accountability work for them, they need to take the following four steps:
- First, abandon compliance mind set. As long as you view social accountability code of conduct as a compliance requirement, business benefits cannot be realized. It will remain compliance and appear as a cost. Compliance mind set breeds frustration while trying to implement and business benefits are not clearly visible.
- Second, take ownership of social accountability. When a factory takes the ownership of social accountability, it starts getting a glimpse of benefits. Once the compliance mind set is abandoned, it becomes easier to take ownership of compliance and treat it as a strategic component of the business. Social accountability principles then need to be embedded across business.
- Third, build social accountability systems. The factory needs to develop systems to maximize advantages. Systems approach also leads to sustained performance in audits, best practices and better control. At this stage, factory begins seeing moderate benefits.
- Fourth, the factory needs to integrate social accountability systems with the rest of the business goals and systems to synergise the operation. Once the management integration is in place, the factory would see spectacular business benefits. Social accountability then appears and acts as a strategic tool to drive productivity and profits.
However, the journey from compliance mind set to management integration is quite challenging and requires a combination of right skills, commitment and patience.
MEANING OF SOCIAL ACCOUNTABILITY
The actual meaning of social accountability is about achieving a harmonious balance between Society, Economy and Environment. Society needs well-being. Economy needs profits. Environment needs conservation. A balance between these three results in sustainability for everyone. However, brands have propagated a narrow meaning of social accountability, which has led to compliance mind set. Their codes of conduct mention Society and the Environment buy not the Economy bit making it hard for factories to understand its business benefits. It appears that brands are focused on managing their own social accountability risks by taking compliance route rather than partnering with factories to work on a win-win proposition.
Global supply chain is now characterized by a fierce competition. Let’s examine what makes a factory competitive. In order to be competitive, factories need to offer quality products at sharp prices. Technology and physical infrastructure are no more a competitive advantage. It’s equally accessible to those who have the capital. The quality of workforce is the actual differentiator because it is a labour intensive industry. Productivity is the key to success. And, productivity can be enhanced only by building a productive work in culture. A productive work culture facilities willingness of people to give their best to contribute to the organizational goals.
Investment in superior technology and infrastructure will not bear fruits if the factory lacks work culture. Can you harness superior technology and quality systems if people are not motivated to give their best? Can you increase productivity without a positive workforce?
Hundreds of factories have closed down in Asia after the textile quota was lifted. These factories did not shut because they did not have machines. They did not close down because they could not make a quality product. They eased out of business because they were not competitive despite having machines and technology. What was missing? People, who make the machine and technology work. These were factories which did not consider people their strategic asset. So, how do we know if a factory has a healthy work culture?
PRODUCTIVE WORK CULTURE
Over the years, have been asking questions to list characteristics of a great company. And, invariably they come up with similar attributes. These include:
- Strong leadership, management vision & value system
- Excellent team work
- High Energy level / high motivation
- Technology & quality system
- Job satisfaction
- Mutual trust
- Positive IR climate
- Clarity of roles & responsibilities
- Focused / result – oriented
Principles cannot create this kind of work environment. A good recipe for creating a productive work culture will include ingredients such as effective leadership, efficient infrastructure, technology & quality systems, clarity of roles & responsibilities, reward for performance, a safe, healthy and dignified workplace, skill enhancement opportunities and management empathy.
Benefits of a productive work culture will count, among others, productivity, quality, innovation and creativity, loyalty, economy in operations, employee retention and higher profits.
BUILDING BETTER SYSTEMS
Smart factories have learnt how to turn social accountability to their advantage. They have understood the business case. Such companies rely on management systems.
When factories take the ownership, they build integrated systems. An enterprise – wide system is like a pyramid made of several pieces holding each other. If one piece is missing, the system either will not be effective. A system demands integration.
They recognize the linkages and inter dependencies between various enterprise value goals. Merchandising, fabric sourcing, inventory management, production planning and control, industrial engineering, sampling, cutting, production, quality and logistics, Finance and Human Resource are all sub-systems coming together to form an enterprise-wide super system. How robust is the system will depend on how competent are your people, how empowered are your people, how motivated are your people and how happy are your people. And this people factor will differentiate why one factory is more productive than the other.
FROM ACCOUNTABILITY TO PROFITABILITY
- A business approach to social accountability turns in business benefits.
- A general surge in productivity can be witnessed.
- Larger benefits include supply chain efficiency,
- Process improvement,
- Productivity improvement,
- Quality improvement,
- Price competitiveness,
- Minimized business risk and liability,
- Better crisis management, and
- Room for supply chain value addition.
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Founder & Editor of Textile Learner. He is a Textile Consultant, Blogger & Entrepreneur. He is working as a textile consultant in several local and international companies. He is also a contributor of Wikipedia.