Disruptions to labour markets and rising labour rates in China were major issues as recently as 12 to 18 months ago. Today many brand owners mitigate the risk by diversifying their supplier and labour bases beyond China, into Vietnam, Cambodia and elsewhere in Southeast Asia and around the world.
Compliance tracking, reporting and management - as it applies to consumer protection, social compliance, safety standards and more - is the bigger challenge today. Deadly garment factory fires in Bangladesh rocked the industry. At the annual executive summit of the American Apparel and Footwear Association (AAFA) last month, Rick Darling, president of Li & Fung USA, urged fellow apparel industry executives to join together and take action to eliminate risk to human lives around the world.
The realities of global sourcing mean that managing strict compliance to standards is tough. A company can perform factory audits, document appropriately marked fire escapes that are not blocked with piles of supply, and file appropriate documentation with the authorities. But how does that company know that an hour after the auditor leaves, the factory staff doesn't pile the supplies high in front of the exits again?
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