Reliance on contracted manufacturing continues to increase, as a growing number of top brands cite a need for sustainable changes in factories and move away from individually spearheaded factory inspections to jointly planned audits, shared information with other brands that source in the same factories, and collaborative correction actions.
Empowered by technology developed by FFC specifically to cut redundancy from factory compliance programs, international apparel manufacturers including adidas, Nike, and VF Corporation now look beyond competitive concerns to change the way they – and other major brands – assess and communicate with factories. The ultimate goal is for sustainable improvement in factories, rather than continuing with the redundant individual inspection processes historically used by most brands.
“Today’s approach to factory compliance audits isn’t optimal,” said Peter Burrows, executive director of Fair Factories Clearinghouse, the not-for-profit organization that developed the technology.
“Several brands often source from the same factory, resulting in an unmanageable number of audits and correction plans. Factories spend more time scrambling for upcoming audits and squelching highest priority corrective issues rather than creating long-term sustainable change. By adopting a collaborative approach, brands can shift their focus to what matters: correction of root cause issues through long-term and sustainable improvements to management systems, employee relations, and environmental issues.”
FFC Provides Safeguards that Avoid Anticompetitive Conduct
Following the US Department of Justice’s issuance of a business review letter dated June 19, 2006, the FFC began offering a secure hosted platform for brand and retailers to share information on factory compliance audits. “The DOJ Business review letter issued to FFC was a vital first step to permit FFC member companies - with numerous safeguards in place - to minimize the possibility of any anticompetitive conduct when collaborating on improving factory conditions,” stated Robert M. Langer, an antitrust partner at Wiggin and Dana LLP, the Connecticut, New York and Pennsylvania-based law firm that spearheaded the FFC DOJ request. “The FFC and its members have established a variety of protocols of behavior regarding the sharing of compliance information that provided DOJ with sufficient comfort, thus permitting the issuance of the Business Review Letter.”
The audit-sharing platform introduced by the FFC in 2006 has undergone several enhancements as FFC members began to shift their focus from comparing notes on historical audits that had already taken place to more forward-looking collaborative actions. “Sharing historical audits was an important first step for us,” notes Ron Martin, Director of Compliance for VF.
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