Supply Chain
New Index Uses Data from Suppliers to Rate Brands and Retailers

What if rating brands and retailers, and not just suppliers, is the key to better supply chains? That is the goal behind a new index from Better Buying. The index provides sustainability professionals with previously inaccessible data about supply chains, as it empowers suppliers themselves to assess purchasing practices of 65 brands and retailers in the global apparel, footwear and household textiles industries globally.

“We want to be able to correlate how improvements in purchasing practices improve workplace conditions, environmental sustainability, and even the financial sustainability of suppliers,” Better Buying co-founder Marsha Dickson told Sustainable Brands in a recent interview.

The index aspires to improve supply chain management through a previously untapped source of data. Currently, most of the information supply chains comes from a few sources — either audits, the most common and maligned way of getting information from complex supply chains, or the often equally problematic self-assessments. Better Buying’s approach is to only use data submitted anonymously through a secure web interface. This was done for good reason, Dickson said.

“Anonymity is important for getting supplier participation and for obtaining the most honest and accurate feedback a possible,” she said. “Suppliers told us they are sometimes invited by their buyers to take part in surveys to share how the buyer company can do better. Many suppliers told us that they don’t participate or are not fully honest because of fear that the buyer will retaliate and choose another supplier that hasn’t complained.”

The idea is that, because the information is anonymous and being provided to an independent source, suppliers will share what they know more openly and, ideally, this will include more critical information about the companies they work with. This data was then analyzed by Better Buying, focusing on a few important criteria, such as Planning and Forecasting, Management, and CSR Harmonization.

Specific brand scores were not released in the index, but regional and industry-specific scores were provided. They found a good overall score on, for example, Payments and Terms, but found that Sourcing and Order Placement was severely lacking across nearly all companies, industries and regions.

Better Buying also made some initial recommendations, calling on brands to take action to improve the predictability and consistency of business with suppliers. It also found more could be done to provide incentives for suppliers to comply with codes of conduct. Amazingly, they found that 60 percent of suppliers reported receiving no such incentives.

This is just the start. Better Buying is an independent project supported by some of the most highly regarded names in supply chain transparency, including the C&A Foundation and Humanity United, and Dickson hopes to both expand the scope of the report in future indices and work directly with companies to address the issues they’ve identified.

“We want them to use the information we provide to begin working to improve their practices,” Dickson said. “We’re hoping to foster a ‘race to top’ and showcase the best practices that are being developed.”

By knowing more about what is working, and what is not, with regards to supply chain management, Better Buying believes better strategies can be developed to improve supply chains from within and make them more sustainable and ethical, to the benefit of all parties.

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