Sustainability in textiles & fashion industry is under intense light. Most of the sale of fashion products occurs in developed countries – with US and European values just under half of value-based global sales – but a large majority of cotton farmers and a large portion of global textile and apparel production occur in developing countries.
When discussing any issues related to the fashion supply chain, it is important to be reminded that textiles and clothing industry is a very important contributor to the world economy. This industry has one of the largest, longest and most complex global supply chains that spread to every country on the planet. Global clothing consumption is estimated at around $ 1.8 trillion making it around 2.3% of global GDP. Global demand is expected to grow at an annual rate of 5% per year as markets in China and other developing countries develop.
This industry makes a significant contribution to the export earnings of several countries: for example, almost 85% of Bangladesh’s export revenue comes from exports of readymade garments.
It is also one of the largest companies in the world as a sector. The industry employs between 60 and 75 million people worldwide. In India, the textile & apparel sector is the second largest company after the agricultural sector.
However, the industry has been hit by questionable working conditions – from inhumane working hours to the lack of proper sanitation and drinking water, appalling work environments and neglect of workers’ health and safety, especially in cutting & sewing operations, which are the most labor intensive and is carried out mainly in countries with low wages.
Over the past few years, there has been a significant increase in awareness of these problems globally including among consumers. Consumer groups, as well as several human rights organizations, have put pressure on brands and retailers to provide visibility into working conditions. But so far, not much has changed.
Why is it so? We cannot approach this problem naively and must be aware of the economic realities of the industry. That fast mode a flourishing industry with a promise of cheap and disposable trendy clothes. The US Bureau of Labor Statistics shows that consumer spending on clothing as a percentage of total consumer spending has been more than half of 5 percent in 1987. This is when the frequency of purchases has increased by 60%.
The brand has its own economy and so far there are no signs of a tendency to pay higher prices for clothing labeled sustainable. There are many reasons for that, and not least because of a lack of trust in the label. The result is that the brand continues to put pressure on factories to produce cheaper and faster. The latest Better Buying Index finds suppliers in the lowest-cost locations pressed for lower prices, with 38% of Bangladeshi suppliers reporting their buyers have held back their prices last year, despite inflation and rising wages.
This condition applies in garment factories because manufacturing has become a very thin margin and operating profitability is low. Factories save costs by investing less in health and safety and forcing overtime work.
The only solution to this problem is investment in better factory working conditions.
Increased profitability from more efficient plant operations
It has been widely accepted in the industry discourse that increasing productivity is an important part of the “solution” to achieving improvements in the welfare of millions of garment workers. Increased efficiency reduces production costs per garment that can be directed toward better factory worker welfare.
This step to increase efficiency must be supported by increased transparency and openness to ensure that the fruits of improvement also reach all beneficiaries. This transparency can then be provided in a way that can be trusted to educate and convince consumers who are otherwise skeptical of the claims made by retailers.
Our analysis shows that the root cause of low productivity on the garment manufacturing factory floor stems from poor managerial skills, not following data driven methods for poor process planning and wage structures.
The reason why the plant did not improve the timeliness method and new training was because of the upfront investment and the uncertainty of the results. If there are benefits from increased efficiency spent on upfront costs, then the cost-benefit analysis is not attractive.
Industry must support innovative solution providers who are willing to break through these entry barriers and work as partners to help industries break their shackles.
After all, consumers want clothes to not only look good but also feel good.
Sandeep Raghuwanshi is the Founder, ESG Robo. ESGRobo is a startup that aims to improve sustainability in the supply chain of the fashion industry.
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