One of the lessons we learned during Covid-19 is that suppliers and buyers need to collaborate more, moving away from conflicting relationships. But how do you make the shift towards collaboration? And what are the obstacles to such an approach to business?
It might make sense to start with the latter and think about what is preventing a closer relationship with customers. I would say that three factors have a major role to play here.
The first is the fundamental issue of trust, and it works both ways. Many manufacturers of RMG are understandably cautious of fashion brands and retailers. They may have had their fingers burned in the past, perhaps during the canceled order crisis in 2020, which damaged buyer-supplier relationships in general.
Likewise, buyers can be overwhelmed by the large number of sellers and the aggressive selling tactics that many deem necessary to adopt in a crowded market. This can lead to reluctance and caution on both sides.
The second factor is the permanent disconnect between sustainability and the buying services of big fashion brands. I have no doubt that the sustainability teams of most of the big brands recognize the need for a more cordial relationship with suppliers, as they understand that bad purchasing relationships and practices can have an impact on the good- be RMG workers.
Does this message reach purchasing managers and purchasing teams? From my perspective, the answer is “occasionally”. Some buying teams are better than others; some understand the need to incorporate sustainability measures into their decision making, while for others it is all about price.
The final barrier is broader and more cultural: conflicting buyer-supplier relationships have become the norm in our industry. This is why it has proven difficult so far to turn the tide, although there are signs that things are improving, albeit very slowly.
So how can we resolve the above issues and forge better buyer-supplier relationships?
For starters, I think we need a broad industry alignment and a âvisionâ of what it means to do business in our industry in the post-pandemic world. We need to act now and stop making the same mistakes we did in the past.
Perhaps we could imagine a sectoral charter for collaborative work? In such a document, buyers and suppliers could both agree and define their expectations when entering into business transactions. In addition to accepting legal issues and customary terms and conditions, such a charter could also seek to achieve a broad consensus on pricing, negotiation, lead times (and the need to allow reasonable deadlines), delivery, samples. (whether free or paid), etc. At the moment, there is a lack of standardization; industry players make things up as they go.
When there are gray areas, they lead to uncertainty, mistrust and bad working relationships. We are all losers in such a scenario, buyers and suppliers alike.
There is also a case for an industry steering group, made up of representatives of buyers, suppliers and independent stakeholders, to oversee such a charter and arbitrate when a buyer or supplier has crossed the line. . Such a steering group could also arbitrate disagreements between buyers and suppliers on contracts and labor relations.
I’m not sure we need more regulations in the industry as buyers and suppliers would say this will lead to more bureaucracy and, if it does, make relationships worse. I am naturally cautious of “voluntary” industry initiatives because, in my experience, their impact in the past has been negligible. In an area like this, however, I think a voluntary approach is the best way forward and could have a real impact, if it could be argued that all parties would benefit. In any case, something legally binding would be very unlikely to see the light of day.
What we might aspire to, then, is a pact that the entire industry makes in the spirit of cooperation and mutual benefit – an agreement to deal with disagreements and arguments of the past, and which charters a clear path for a future in which buyers and suppliers work for each other, not against each other.
Mostafiz Uddin is Managing Director of Denim Expert Limited, and Founder and CEO of Bangladesh Apparel Exchange (BAE) and Bangladesh Denim Expo.