The Human Thread

Tag Archives: supply chain

Business Viability: “Why Chasing Cheap is About to Get Costly”

August 08, 2016

Author: editor

Category: Learn

going-out-of-businessThis week, I saw a fascinating article from The Sourcing Journal. The Sourcing Journal describes itself as “the premiere trade publication for apparel and textile executives focused on sourcing and manufacturing.” The founder and CEO, Edward Hertzman, has deep experience in the supply chain for the apparel industry. His article, entitled “Unsustainable Sourcing: Why Chasing Cheap is About to Get Costly,” and the concerns he raises, complements many of our concerns here at The Human Thread. Follow the link and read the article.

Essentially, Hertzman’s argument is that the apparel industry cannot afford to continue on the road it has trod. From a business standpoint, the apparel industry is no longer viable. Today, underscoring his point, Macy’s announced that it will close 100 stores in the new year. The viability problems create an additional layer of problems. The industry, the race to the bottom, takes shortcuts to reduce costs. In Hertzman’s words:

The challenge then becomes accommodating such a price reduction in an ethical and profitable way, which some have been unable to do. So, the question becomes: Are we encouraging deceptive practices?

Retailers have also created a system which rewards wholesalers who cheat.

This is a don’t ask, don’t tell problem of the industry. As long as stadiums were packed, no one cared if home runs were helped by baseball players who took steroids. It’s not so different in our industry.

The problem is that, unlike tainted baseball statistics and the steroid-using players suffering the health consequences, the garment industry has consequences for tens of millions of factory workers across Asia and Latin America and nearly five million employees for U.S. retailers. And those are just some of the costs. In addition to unsafe factories, miserable wages, and human trafficking, cutting corners in the creation of apparel causes irreparable damage to the environment as the second largest contributor to global carbon emissions and the reckless disposal of chemicals used in the process.

Leaders in supply chain work, like Mr. Hertzman, see that there is a problem. Retailers see that there is a problem. The factory owners see that there is a problem. The unions and garment workers see that there is a problem. Governments and non-governmental organizations see that there is a problem.

Sadly, most consumers only see sales and discounted garments without seeing the costs.

What will it take for us to come together to make necessary changes?