clothing manufacture – The OM Blog by Heizer, Render, & Munson

OM in the News: Amazon’s Bangladesh Problem

Clothing sellers formed safety-monitoring groups after the 2013 Rana Plaza collapse.

Ethical lines aren’t clear-cut in the global garment-supply chain, which remains a murky network in which clothes pass from factories through traders around the world. After a 2013 factory collapse killed more than 1,100 people in Bangladesh, most of the biggest U.S. apparel retailers joined safety-monitoring groups that required them to stop selling clothing from factories that violated certain safety standards.

Amazon didn’t join, reports The Wall Street Journal (Oct. 24, 2019). The site today offers a steady stream of clothing from dozens of Bangladeshi factories that most leading retailers have said are too dangerous to allow into their supply chains. Apparel appears on Amazon that is made in factories whose owners have refused to fix safety problems, such as crumbling buildings, broken alarms, and missing sprinklers and fire barriers. Walmart, Target, Costco, and Gap have agreed to have their supply chains inspected and to disclose to the groups the factories that supply them.

Clothing including pants, sweaters, and robes that originate from blacklisted factories have ended up on Amazon, which has become a major player in apparel. Other retailers must compete in this market, where customers often seek the lowest price. Amazon may have overtaken Walmart as America’s No. 1 clothing seller and dominates the online-retail market.

Amazon runs its platform without many of the constraints that other companies apply to their products and stores, sometimes in ways that can put customers and workers in danger. That is particularly true for Amazon’s third-party marketplace, made up of millions of individual sellers. Many are anonymous and aren’t subject to some of the oversight Amazon applies to its own brands and to items it sells directly. Thousands of products listed on Amazon are deemed unsafe by federal agencies, are deceptively labeled or are banned by regulators—items that many retailers’ policies bar. They include items such as unsafe children’s toys and recalled motorcycle helmets. Amazon doesn’t inspect factories making clothing that it buys from wholesalers or that comes from third-party sellers.

Classroom discussion questions:

Is this a significant supply chain issue? Why?
What is Amazon’s responsibility in selling products from Bangladesh–and elsewhere?

OM in the News: Garment Makers Returning to Bangladesh

The dollar value of apparel exports from Bangladesh to the U.S. is up 14.5%

The trade war between the U.S. and China has led many fashion brands to shift production to spots across Asia, including to Bangladesh, where safety issues persist years after two horrific workplace accidents killed more than 1,000 workers in 2012-2013. American clothing makers cut back on sourcing from Bangladesh or abandoned the country entirely, after the accidents.

In the aftermath, large U.S. retailers formed the Alliance for Bangladesh Worker Safety, an organization responsible for inspecting Bangladeshi factories that produced Alliance brands goods. The organization recommended improvements for structural, fire and electrical safety, and blacklisted factories that failed to make changes. When the Alliance dissolved in 2018, it said 90% of factory-safety issues had been resolved for factories in its program.

But some industry analysts say that safety and compliance issues persist, including structurally unsound factories and retaliation against employees who join unions. One global audit company has found continued use of child labor in the Bangladesh apparel supply chain, stating that over 80% of factories in South Asia were in need of improvement.

Now new tariffs have gone into effect in that already difficult environment. Since Sept. 1, most Chinese garment imports to the U.S. are subject to 15% tariffs—enough in the apparel industry to make many products uncompetitive. So companies have bulked up sourcing in Bangladesh amid “safer” conditions, and according to The Wall Street Journal (Sept. 6, 2019), at least one major brand that left—Ralph Lauren—has returned.

China remains by far the world’s largest supplier of garments. The shift to South Asia will only come gradually, in part because China’s high-quality infrastructure meant clothes could be shipped quickly from Chinese factories to the U.S.—necessary in the age of fast fashion, when consumers alight on new styles every few weeks.

Classroom discussion questions:

Besides tariffs, what other factors are driving manufacturers out of China?
What are the plusses and minusses of Bangladeshi production?

OM in the News: Still Outsourcing to Bangladesh

It has been 5 years since the 2013 garment factory collapse in Bangladesh that killed 1,134 people and left over 2,500 injured. The Rana Plaza factory building was expanded illegally, with extra floors stacked one on top of another. An engineer had declared it unsafe, and the thousands of people who worked inside, stitching garments for clothing brands from around the world, knew it was trouble. The tragedy focused international attention on Bangladesh’s role as the world’s second-largest garment producer, and led the government and manufacturing associations to promise big improvements.

Many of the world’s top clothing brands said they would stop contracting with factories if they failed to improve safety for their workers. European and U.S. brands set up programs meant to improve safety. Five years later, the situation is complicated, and factories overseen by the government and subcontractors remain at risk. About 3,000 of the country’s 7,000 factories are still exposed to life-threatening risks, ranging from a lack of fire safety equipment to serious structural flaws, reports The New York Times (April 24, 2018). The dangerous factories, often small, sometimes subcontract work from larger factories that deal with foreign brands. Textile exports are a huge business for Bangladesh, bringing in $28 billion annually, mostly from Europe and the U.S.

Under new programs, some 2,300 factories have been inspected and many have upgraded their safety standards. Industry insiders guardedly admit that subcontracting remains a problem, since larger businesses sometimes contract some work out to smaller, less-safe factories. This issue of outsourcing (Chapter 2) remains controversial to Westerners, who want inexpensive clothing, but ethically produced.

Classroom discussion questions:
1. What is the responsibility of Western firms whose manufacturing takes place in countries like Vietnam, Ethiopia, or Bangladesh?

2. What was the agreement reached shortly after the collapse?

OM in the News: Levi’s New Laser-Wielding Robot That Makes Ethical Jeans

You know those jeans that your students love, the ripped ones that look like they’re 30 years old? (Even though they just bought them.) You probably don’t realize it, but a team of designers took weeks to figure out exactly where to fade the indigo and position the tears for the most authentic vintage look, reports Fast Company (Feb. 28, 2018). Then, factory workers used sandpaper and harsh chemicals to make it look properly worn in. The jeans washed for hours, so that the blue color would fade out–even though those dyes end up polluting the groundwater.

At Levi’s, a brand that talks about trying to be as sustainable and humane to workers as possible, the ugly reality of what it takes to make jeans—especially when you are selling $4.6 billion worth of them a year—isn’t something that is brushed under the table. “Our company offers over 1,000 different finish looks per season, which is mind boggling,” says a Levi exec. “They’re all produced with very labor-intensive, repetitive motion jobs, and a long list of chemical formulations.”

But the firm has just introduced a brand new laser technology that will, in a snap, do what now takes much longer. The breakthrough uses infrared light to etch off a very fine layer of the indigo and cotton from a pair of jeans, creating the same kind of faded finishes and tears in 90 seconds flat. “It started as an idea for a change in a manufacturing process,” says Levi’s supply chain officer. “But it has actually evolved into a holistic digital transformation that covers the whole supply chain from end to end.” Using the laser-wielding robots in Levi’s factories has the potential to eliminate many repetitive, dangerous tasks that are an everyday part of the job for denim workers– and help cut down on the 13,500 workforce. The new laser tech saves time, effort, and the Earth.

Classroom discussion questions:

Are your students aware of how faded jeans impact the Earth?
Why is this a supply chain issue?

OM in the News: Bangladesh and the Clothing Supply Chain

Global apparel companies often depict their international supply chains as tightly scrutinized systems to ensure that clothing sold to American buyers is produced in safe, monitored factories. Yet their inspectors usually check safety factors and working conditions, not the soundness of the buildings themselves, and the companies often have little control over the subcontractors who do much of the work. This was the case in Bangladesh’s chaotic industrial center. The building collapse last week that caused at least 1000 deaths, reports The New York Times (May 1, 2013), has produced some jarringly different responses from Western apparel retailers that obtained goods from factories inside the building. Several American and European retailers have sought to minimize any ties they had to factories in the Rana Plaza building, while some other companies have been quick to acknowledge their ties to those garment suppliers — and have pledged to contribute to a fund to help families of the victims.

The Children’s Place, a NJ retail chain that operates 1,100 stores, said that although a garment factory inside Rana Plaza had produced apparel for it, “none of our apparel was in production there at the time of this terrible tragedy.” But customs documents show that over the past 8 months, Rana Plaza had made more than 120,000 pounds of clothing sent in 21 shipments to the Children’s Place.

After labor groups said they had found labels of Benetton clothing in the rubble, Benetton initially denied using any factories in the building. But as more labels and documents showing Benetton orders were found and publicized, the company revised its response, saying it had placed only a one-time order there and had severed ties with that factory. The head of one anti-sweatshop group criticizing Western companies stated: “It is high time for Benetton to stop this senseless game of always trying to pretend they’re not there.”

Discussion questions:

1. What is Benetton’s responsibility in a case such as this?

2. What options do operations managers have to deal with fires, collapses, and other tragedies in countries like Bangladesh and Pakistan?