ACT publishes unprecedented look into purchasing practices of global brands
The ACT report ACT Purchasing Practices Surveys by Brands and Suppliers 2021 provides an important window into the complex business relationship between ACT brand members and their suppliers.
These are the largest surveys into the specific purchasing practices of major international brands and retailers carried out to date with 1,338 suppliers and 1,831 brand employees participating. The surveys were carried out across all key garment manufacturing countries including the four countries where ACT directly operates: Bangladesh, Cambodia, Myanmar, and Turkey.
It marks a significant contribution to understanding the state of play for purchasing practices in the global garment, textile and footwear industry. Javier Losada Montero, Chief Sustainability Officer, Inditex says: “The surveys have been a vital step to help ACT member brands understand where we have improved and where we need to continue working. It has also strengthened knowledge of our own processes and those in the industry. The results only reinforce our commitment to responsible purchasing practices, enabling us to hone our efforts to ensure the full implementation of best practice.”
Purchasing practices are the ways in which global retailers and brands interact with manufacturers when sourcing and buying products, and directly affect a brand’s business partners and their workers. Responsible purchasing practices can increase stability, leading to productivity gains, sustainable growth and building strong relationships. They also can improve their ability to meet sustainability and ethical requirements. Christina Hajagos-Clausen, IndustriALL textile and garment director says: “For workers in a supply chain, responsible purchasing practices can help create an environment that enables improvement in working conditions and wages. They can ensure workers can get paid on time, have stable employment and reduce the need for excessive overtime.”
The surveys were carried out across all key garment manufacturing countries including the four countries where ACT directly operates: Bangladesh, Cambodia, Myanmar, and Turkey. The brand and supplier surveys canvassed 16 focus areas, over 71 multiple choice questions, concerning the purchasing practices of brands and retailers. The survey report paints a picture of the strong steps being taken by for ACT member brands in the implementation of responsible purchasing practices and the generally positive experiences of suppliers. Against a scale of 1 (never) and 5 (always/well established and effective) suppliers, on average across all questions, scores were three (out of four/ five) or above; indicating that both suppliers and brands think most measures are in place or followed.
The report found that the focus areas of the ACT Global Purchasing Practices Commitments remain the most relevant areas, affecting not only the entire supply chain but also requiring most attention. These include especially price quotation and negotiation, terms of payments, sourcing practices, planning and forecasting, and training and awareness. According to suppliers, the purchasing practices areas most relevant to creating conditions required to pay a living wage to workers are price negotiations (57% of suppliers), order placement (49%) and prices quotations (48%).
The report also details key areas for improvement and further analysis, indicating a need for much greater education and awareness building with both brand employees and suppliers. “Training and awareness raising is one of the five ACT Global Purchasing Practices Commitments and a critical lynchpin in realising our ambitions in ACT” explains Andrei Vasiliev, Social Impact Manager at BESTSELLER.
The comparison between the supplier and the brand survey offers an interesting insight into the experiences of different stakeholders. The ACT Purchasing Practices Surveys are an important step in closing the gap between what a brand thinks its purchasing practices are and how they are experienced by suppliers.
Julia Bakutis, Strategy Lead for Fair Jobs at H&M Group says that “We at H&M Group are committed to having responsible purchasing practices and being a fair business partner. We truly value the feedback we received through this survey from our suppliers, and we will use the results to continue to improve our work in this area. We hope that the findings of the report will also be valuable for the broader industry.”