The Impact Of Ethical Sourcing On The Selection Of Production Sources In A Fashion Supply Chain

Topics: Ethics, Cotton, Fair trade Pages: 7 (1521 words) Published: April 16, 2015
The impact of ethical sourcing on the selection of production sources in a fashion supply chain

1. Background
Ethical sourcing in the clothing industry refers to the process of procuring raw materials, packaging and accessories in responding not only to the economical concern, but also, perhaps more importantly, to the environmental and social issue. The sourcing companies are preferred to source products at the lowest possible price, while at the same time ensure the suppliers produce the products with social and environmental considerations. The purpose of this policy is to ensure that products and raw materials purchase by or on behalf of a company consistent with the mission to develop and promote ethical responsibility at every stage in a fashion supply chain. In 1990s, fashion retailers mainly focused on the economical aspect i.e. lowest cost with reasonable quality, of achieving the products. While ethical issues are increasingly concerned recently in supply chain management. Globalization is likely one of the factors that contribute to the transform, which many companies move the production lines offshore to those developing counties for the reason of lower production costs. Concerns on the human right of the workers and the environment protection have been raise in these countries. Change in consumer purchasing behaviour may be another factor. This change may possibly increase pressure on fashion retailers or producers to sell or use products that are produced environmentally friendly and respecting human rights. Any failure would probably destroy the companies’ trustworthiness and even threaten corporate survival. International brands Gap and Nike are examples that suffered negative publicity as a result of failing to maintain the ethical issues in their production process. This appears to force fashion companies to adopt ethical sourcing and ensure their suppliers in all stages of supply chain act accordingly.

2. Finding and Discussion
The impact of ethical souring on the selection of production sources can be divided into two aspects: the selection of suppliers and the selection of production materials. 2.1. Selection of suppliers

Traditionally, under limited information about the suppliers, fashion buyers tend to use price as a standard for selection of suppliers in which the lower the price a supplier offered, the more likely the supplier will obtain the business in a pool of potential suppliers. In addition to price, quality, delivery time and services provided may also affect their choices. Today, however, fashion companies take into account two additional concerns, i.e. social responsibility and environmental sustainability, when selecting new suppliers. Price used to be considered as a critical factor in evaluating and determining suppliers as the price of raw materials contribute most in the production costs. Therefore to cut the production costs, fashion companies may choose the suppliers with the lower price. This low price, however, may reflect lower standards in response to the workers treatment and environmental protection. As to keep costs low, suppliers may pay low wages, require the workers to work long hours, provide poor working environment for their workers and employ child labors in order to gain the business and undercut other potential suppliers. These unethical social problems are now widely criticized by public and therefore trigger a change in supply chain management. Cooperate with those unethical suppliers may have a risk of reputational damage, and consequently many companies start to consider ethical issues when they are choosing suppliers. The main barrier for ethical souring on selection of suppliers may possibly be the costs. It seems difficult for the suppliers to produce products as cheap as before and at the same time adherence to ethical production, because they may have to increase the wage rate, improve working environment, and use safe and environmental...
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