Increasing the Power of Apparel Suppliers with Better Buying September 8, 2017 • Hong Kong Fashion Summit Marsha A. Dickson, Ph.D.
The Problem of Buyer Purchasing Practices Time, financial resources, predictability of business
Challenging Buyer Purchasing Practices ▪ Constantly fluctuating forecasts and differences between actual orders and capacity booked • “50% fluctuation in forecast is common.” ▪ Failure to meet critical deadlines, such as handing off technical specifications “Some buyers do really well and hit 100% of their critical milestones, but others • hit only 50% and that is a big problem and has a big impact on production time.” ▪ Prices that do not cover compliant production “Not one penny more, our buyers tell us; our costs go up and our margins go • down.”
Challenging Buyer Purchase Practices (continued) ▪ Failure to Abide by Payment Terms “Just pay us when you said you would pay us.” • ▪ Heavy debt incurred from financing buyers’ business for months on end “As a manufacturer, we are increasingly being asked to finance our buyers who • are some of the largest brands and retailers in the world.” ▪ Lack of incentives for providing workers better conditions “We have many social and environmental requirements, but we get no incentives • when we improve our performance.”
Brief Overview of Better Buying
Better Buying Mission ▪ The overarching goal of Better Buying is to support industry-wide transformation of buyer purchasing practices so that business relationships support suppliers in providing decent workplace conditions. ▪ We achieve this goal by widely disseminating detailed data and analysis on the purchasing practices of buying companies using supplier ratings submitted biannually, and working with stakeholders to accelerate industry-wide improvements.
What is Better Buying? How does it work? ▪ WHAT? A system for suppliers to communicate with their buyers about purchasing • practices without putting the business relationship at risk ▪ HOW? Suppliers register on the Better Buying platform with some basic • information about their companies Suppliers submit ratings of buyers purchasing practices • • Supplier anonymity is protected — minimum of 5 ratings are averaged Buyers are provided ratings summaries • Process repeats every six months to track changes • Public reporting of buyer ratings after second rating cycle •
Overall Ratings (eventually buying companies will receive individual ratings)
Secure and Anonymous ▪ Hardware Security Data center security • Firewall security • Threat manager • ▪ Software Security Secured Socket Layer (SSL) Protocol • • Roles manager • URL spoof prevention • Captcha image Password security •
Better Buying Initial Disclosure Schedule Build Suppliers begin Data analysis, Suppliers rate Data analysis, Q3 2017 Q4 2017 Q1 2018 Q1 2018 Q2 2018 preparation of awareness of rating buyers. preparation of buyers a reports, and rating system reports, and second time. buyer with suppliers. engagement engagement. with buyers Buyers having 5 having 5 or or more ratings a second time more ratings. informed of 90- day window to provide responses Public before public disclosure of disclosure. industry – wide First and second report. round of ratings are made public on website along with buyer responses.
Better Buying Amplifies and Leverages Supplier Voice YOUR voice . . . . !
Better Buying and Education Design and Beyond . . . . . .
Better Buying and University Programs Be educated on the challenges that day-to-day business activities can place on suppliers. Prepare to challenge business as usual when it is encountered in the workplace.
Better Buying and Professional Education Internal staff involved with planning, design, development, testing and quality assurance, sourcing, and others must be educated about their impacts. BUT WE CANNOT STOP WITH EDUCATION — policies will need to be redesigned to reinforce behavioral change. As changes are implemented in buying companies, supplier ratings will document the effectiveness and continuous improvement of buyers.
Better Buying and Supplier Education Suppliers need to be aware of the unique opportunity provided by Better Buying. Better Buying is about YOU evaluating your buyers . . . . Perhaps for the first time! Suppliers need to understand the protections built into the Better Buying system. Better Buying is a safe place. Suppliers need to know with public disclosure they will be able to use Better Buying rating scores to benefit their business!
Business Benefits for Suppliers ▪ A platform for effective communications. ▪ Measures the effectiveness of buyer efforts to improve over time. ▪ Help suppliers choose and negotiate with buyers.
Better Buying Change won’t happen without your ratings . . . . Rate as though your business depends on it . . . . . .
Thank you! info@betterbuying.org www.betterbuying.org
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