Supply chain resilience: Building a sustainable future
As part of our ‘Friday Connect’ series, we caught up with Sam Jones, founder of New Zealand-based uniform company Little Yellow Bird, Justin Cudmore, a partner at Marque Lawyers and co-chair of the Australian Fashion Council, and James Bartle, founder of Outland Denim.
Could things be shifting in the fashion industry? Socially-conscious consumers are already using their dollars to support ethical fashion, but it looks like luxury brands could finally be catching up.
Gucci’s Creative Director, Alessandro Michele, recently acknowledged the fashion house’s troubles with sustainability, saying their ‘reckless actions have burned the house we live in.’ And as we all know, where the luxury brands lead, the high street brands will follow.
But when it comes to making the shift towards a more sustainable future, where should these brands start?
The Modern Slavery Act’s effect on supply chains
The Modern Slavery Act was introduced in Australia last year, but what does it mean for businesses now? Justin from Marque Lawyers boiled down the legal jargon for us: “In a nutshell, the Act, which came into play in 2019, is to hold large Australian organisations accountable for investigating their supply chains for the risk of modern slavery.”.Accountability is a great start, he explains, but the actual repercussions are minimal.“These companies have to lodge annual reports with Border Force, but only if they’re bringing in more than $100 million a year. The problem is that if they don’t have to oblige by the act, there’s no penalty for non-compliance. The worst that happens is the company is named and shamed by the government.” It’s more PR control than anything, he says. With the Modern Slavery Act offering very little consequence, the responsibility falls on brands to understand their supply chain’s ins and outs. They need to lead by example.
Leading by example
Sam from Little Yellow Bird (LYB) is a big believer in brands taking full control of their supply chain. “Before I even started LYB, I went over to India and spent time working in a factory to see things firsthand. I built my relationships from there,” she explains. “It was a real investment of time, focus, and energy but it was the foundation for us. I built the business on the back of those supply chain relationships.”
When he founded Outland Denim, James was so determined to get the supply chains right that he decided to vertically integrate the business from the start: from manufacturing to sales. Seeing the exploitation of labour in countries like Cambodia made that decision.“The reason we started Outland was to help people in Cambodia who were being exploited. Owning the manufacturing made that easier for us,” James explains. “Tracing a supply chain can quickly become a game of smoke and mirrors. Compliant suppliers will regularly take the purchase order from you and then push the work out the back door to someone down the road. The emphasis is on the brands to always be actively looking for slavery in a supply chain. It shows the suppliers that they can’t hide it.”
From a legal perspective, Justin agrees that supply chains are a dark web and difficult to get full transparency over. “As a lawyer, we make sure that everyone has rights under the contracts we provide and we put together questionnaires for brands to give to their suppliers but it’s very difficult. The law is important, yes, but Sam’s right when she says that it’s the relationships that are integral.”
Managing supply chains in a pandemic
Both Little Yellow Bird and Outland Denim leaned on B Corp values when the pandemic hit. “We saw that the big fashion brands were cancelling or delaying orders and for our suppliers, cash flow is life,” says Sam. “If we can’t support them through the pandemic then the relationships we’ve spent years building will be useless if they have to close. We see our relationships as long term and supporting them is the right thing to do. We’ve honoured all of our purchase orders and continued to place orders, albeit with longer delivery times.”
Outland Denim entered into an education phase with its Cambodian team, training them on how to use sanitiser, hygiene protocols, and extra cleaning before finally deciding to send the team home with full pay, James recalls. “The important thing for us was to keep paying people or like Sam says, you’ll have nothing left when the pandemic is over. It’s the brand’s responsibility to look after its people.”
Justin agrees that the cancellation of orders has a massive effect on brands, and it’s always the garment workers that are hit the hardest. “There has been huge discounting and so there is a need for businesses to make things cheaper, which makes the risk higher for people to fall into slavery,” he says.
A sustainable future
The fashion industry is a notoriously competitive environment but Sam, James, and Justin all agree that partnerships and collaboration can benefit everyone.
“The Australian Fashion Council was started as a space for people to share resources. If a brand finds an ethical supply chain we want them to share it,” says Justin. “Brands are realising that they can be stronger when they work together. An example being the Allbirds x Adidas partnership, where they worked together to create a carbon-neutral shoe. These brands should be arch competitors but they collaborated and created a sustainable product .”
For Sam and the team at Little Yellow Bird, the collaborative approach is a key part of their strategy and they manufacture for six different brands. As Sam puts it: “our supply chain is open and we like to support other businesses with what we’ve learned.”
It’s a sentiment echoed by James: “I think partnerships are just smart. Karen Walker was Outland’s first partnership and we learned so much as a business,” he says. “Sharing information makes for a more sustainable future. Gone are the days of cut-throat competitors. When we collaborate, we all learn something.”
What we learned…
Little Yellow Bird and Outland Denim both agreed that having a personal relationship with your supplier is the best way to keep the supply chain honest and transparent.
Fast fashion is at a tipping point that can’t be sustained. With luxury fashion houses like Gucci saying they can keep up the pace of 6 collections a year, Justin from Marque Lawyers hopes it’s the start of a movement towards less consumption.
Less competition and more collaboration is the future. Little Yellow Bird is already sharing its supply chain by manufacturing garments for 6 other brands. Outland Denim has partnered with Karen Walker and found that sharing information was beneficial to both brands.