Apparel, footwear and home-textile manufacturers are still smarting from Covid-19’s disruptive impacts more than two years after the pandemic upended their businesses and livelihoods, according to a short, anonymous survey that aims to ascertain the quality of buyer-supplier relationships worldwide.
Better Buying’s Partnership Index, the research platform’s second since 2021, saw the overall score improve by a mere one point from last year, with “noticeable” dips in individual scores for business stability and buyer visibility, which fell by 6.7 percent and 2.4 percent respectively. Some scores improved, albeit modestly, such as buyers’ efforts to reduce duplicative audit requirements (4.2 percent), the fairness of buyers’ financial terms (4.1 percent), buyers’ efforts to improve working conditions in supply chains (3.3 percent), and whether a buyer was a preferred partner (2.1 percent).
Meant to complement Better Buying’s more comprehensive Purchasing Practices Index, the BPPI is a “short, subjective, high-level look” at the key problem areas in buyer-supplier relationships in the soft-goods sector, said Marsha Dickson, the organization’s founder and CEO. It comprises 12 subjective measures, along with three open-ended questions for suppliers to provide additional details about their buyers.
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The idea, Dickson said, is not to provide so much of a “Better Buying Lite” but a more succinct means of assessing how the industry measures up to Better Buying’s five responsible purchasing principles—that is, business visibility and order forecasting, long-term stability, reasonable timelines, fair financials and a sense of shared responsibility—plus other areas of interest such as communication, the opportunity to provide input on innovation and operational efficiency.
“It was designed to provide another look that was more about perceptions,” she said. “So it’s to get a high-level snapshot of where the problem areas are.”
Participation increased significantly in this year’s BBPI, with 1,162 suppliers from 54 countries rating 160 buyers in 2022, versus 679 suppliers from 50 countries rating 100 buyers in 2021. One-quarter of the ratings were from suppliers headquartered in China (24.1 percent), with others coming from Bangladesh (8.7 percent), Hong Kong (7.8 percent) and Turkey (6.7 percent). Most (78 percent) received their orders directly from the brands or retailers.
Brands and retailers that subscribe to the BBPI are able to pull out data that relates to their specific supply chain, something that Dickson says can help buyers get a more accurate sense of how they’re performing in the eyes of their suppliers. This, she said, can give buyers a better understanding of how much further they need to go when it comes to improving their purchasing practices.
“If you can imagine an athletic footwear company; we know they often have really long R&D relationships with the companies that they work very closely in partnership with. They probably need to forecast differently and in a different time horizon than a fast fashion company that’s using materials that are pretty much standard,” she said. “And so the Partnership Index starts to tell us where you need to go on that more detailed scale. Is providing a forecast 90 days out good enough? Do your suppliers say they have enough visibility?”
Better Buying boasts roughly 30 subscribers, including Adidas, Gap Inc., Eileen Fisher, Lululemon, Patagonia, Nike and Reformation. Companies that maintain participation across different rating cycles can trace trends and flag potential problems in their purchasing practices sooner rather than later, Dickson said. They’re also the ones that want to do better. Repeat BBPI subscribers, for example, increased their overall score by an average of three points over last year.
But the fact that business stability and buyer visibility declined across the board doesn’t come as a surprise to Dickson given the yo-yo-ing consumer demand and inventory woes that the industry continues to grapple with.
“Those are things that are directly tied to the visibility and the stability of the relationships,” she said. Letting these deteriorate is problematic for a host of reasons. Without knowing what orders a buyer will be placing in the future, suppliers are unable to plan production or optimize their capacity. This can create higher costs, disrupt worker schedules and make it more challenging for manufacturers to comply with codes of conduct.
And even the most mindful of brands can use a steadying hand. In the case of Reformation, recent survey feedback indicated that it needs to focus on improving those same two areas, which it says are ongoing points of focus.
“So far we’ve incorporated feedback for agents and suppliers on things like lead times, raw material sourcing, product design, product development timelines, sampling and testing, on-time delivery and more,” said Carrie Freiman Parry, the Los Angeles-based brand’s senior director of sustainability. “We’ve also rolled out internal training for team members involved in Reformation’s design, product development, production planning and purchasing to ensure everyone is on the same page from the beginning of their employment.”
With the pandemic accelerating the need for collaborative partnerships between buyers and suppliers, Better Buying’s surveys have helped Reformation’s teams understand how decisions made “during this difficult time” can affect workers, Freiman Parry said. They also helped the company get feedback on how its business practices have shifted due to supply chain disruptions and economic challenges, as well as ensure that it remains “up to speed” and in “close conversation” with manufacturers.
“We know that our purchasing practices have a very real impact on our suppliers, workers and the environment, and we have an obligation to acknowledge and account for this,” she said. “Better Buying tools can play an integral part in building a comprehensive social responsibility program, enabling us to gather feedback, learn and take action as a business.”
What Dickson finds hopeful is that some of the improving scores show that brands are finally waking up to the fact that their business relationships can have a “huge impact” on suppliers and orders, though she admits that the data is only as good as its respondents. Averages also tend to elide some of the variability in experiences.
“If we were able to have suppliers talk about every terrible customer that they had, it could be a bit different,” she said. “But at least we’re getting data from small companies, from large companies, from companies in between, all over the world. That helps us start to feel comfortable with the representation of our data.”
For Dickson, some of the biggest problems also appear to be among the most fixable. In the case of business stability and buyer visibility, communication is key. Buyers cannot slacken their focus on maintaining business relationships with suppliers.
“The [lack of] planning and forecasting is so pervasive that time and time again, this is what suppliers are saying should be a priority,” she said. “And a lot more companies are aware that they need to be doing something, so that’s positive, but we need to move more quickly because there’s still a lot of problematic practices. And there’s a lot of companies that we don’t know much about or don’t know enough about.”
Seeing subscribers improve, however, is what keeps Dickson going. Ultimately nobody wants to be treating suppliers badly or making the conditions worse for workers, she said.
“It’s really encouraging to see [certain indicators] trending up,” Dickson added. “Because it’s kind of like, ‘Hey, maybe they’re getting the message.’”