On October 1st, we explored the key elements of sourcing and cost calculation. What did we learn, an if you were not able to attend, what did you miss? Read all about it in this blog!
Antonio Barberi Ettaro kicked off the day with an overview of the latest developments in trade policies and regulations for sourcing and trade countries. What is happening between China and the US, and how does this effect trades for EU/Dutch countries? What is the status of agreements between the EU and Cambodia, Myanmar and Vietnam? And what will be the different effects of possible Brexit outcomes? At least there will be a transition phase until the end of 2020.
Ton Wiedenhoff presented statistics demonstrating which are the most important sourcing countries at this moment and the transition that happened over the past years. It is clear that the Chinese market is declining, Bangladesh is still seen as the most interesting sourcing hotspot, but Vietnam is closing in. Upcoming markets are definitely Pakistan and Sri Lanka. Interesting to see is that the workwear market is showing different statistics. For this group we see way less shifting. This market is less influenced by trade-wars, maintaining China still as a stable sourcing market. Besides regular sourcing countries, we find interesting developments in nearshoring; 20% of the sourcing volume will be nearshore in 2025. Companies are investing in speed, so producing close to market, but also virtual sampling and micro factories are upcoming.
Different sourcing countries come with different risks and challenges in our supply-chain. A great tool to map these risks is the Modint Due Diligence Tool. This tool is developed to help companies in their Due Diligence process. It assists in determining risks in their supply-chain in to support their risk analysis and compare different countries. It also contains a list of general tools, documents and projects in production countries. The tool will be updated with new countries and recent publications this month. It is free for Modint CR Members. Please contact Modint when interested, so you can start with getting insight on risk and impact, so you can act on it.
We invited Jan Hilger from PVH to give his insights on costing. Most of our guests in the room are surprised and shocked when Jan stated that one sample in the showroom costs on average €15.000,- . So, what is his view on virtual sampling? The technology is definitely there, but the people are not ready yet…
How a cost price is traditionally built up and calculated is explained to us by Marcel Sterk from Blue Water group. Your cost price can be calculated by standard allowed minutes, and Country minute values (which vary per country). On this topic, Modint Academy also offers a course to get complete insight in different factors that affect the cost price in a positive or negative way.
Instead of focusing solely on the lowest production price, Fair Wear Foundation strives for a more ethical garment industry and therefore pushes toward living wages. At this moment overtime is needed for most workers to reach the living wage level. Jesse Bloemendaal explained the importance of looking at the connection between costing and what the worker really gets paid. FWF provides tools and guidance to give companies more insight in living wage and the impact on te production price.
CSR is at this moment the most important sourcing attention point, states Nienke Steen. This is a huge difference from a couple of years ago. We need to rebuilt trust. We may be one of the most polluting industries, but we are also aware of that, and acting on it. Let’s spread the word. We also need to put our words into action, by improving our buying behavior. Our purchasing practices have (in)direct influence on labour conditions, environmental pollution and animal abuse.
A global initiative that provides information about buying behavior is Better Buying. Through a video call, Marsha Dickson informs us about their practices. Better Buying allows suppliers to anonymously rate the purchasing practices of the companies that buy their products and tells brands and retailers which practices can be improved. For an overview, take a look at the 2019 Better Buying Index Report.
A relatively new way of looking at costing is True pricing. Florian Reuter shows us the different between financial price and true price. The true price is the market price plus unpaid external costs. The true price gap of a pair of jeans is €33,- (wholesale price) and consists of both social- and environmental costs. Florian showed us that these unpaid costs are always there, but most people can only relate if we express it in Euro’s.
One of the most common ways to improve labor and social conditions are audits. Most of the time factories are not really involved in audits, which just happen to them and takes up a lot of time. Holly Menezes quickly shows us the way in which SLCP is making a change within this issue, mainly by providing their members a Data collection tool. This tool makes sure the facility is able to collect their own data and share them with different clients and partners. This frees up a lot of time for them to focus on other issues, such as buying behavior and transparency.
Transparency is becoming more and more important in our industry. One way to Power transparency, Miriam Geelhoed explains to us, is Blockchain. This technology makes it possible that relevant data can be sent to whoever needs to receive it and holds all supply-chain partners accountable for each step. Blockchain also brings some challenges with it, please contact Modint when you are considering this and would like some assistance!
An example of using blockchain in the textile industry is shown by Niccy Kol, from their collection made with ocean plastics. The company uses the technology to provide transparency and traceability, to verify that the products really originate from plastic that was collected from our oceans.
Matthijs Crietee from IAF updates us about European developments on PEF, Product Environmental Footprint. This is a methodology to calculate the total environmental footprint of a product. At this moment only big companies are active in the responsible working group. But such methodologies are only worth something when it is widely accepted. It is a possibility that PEF will be the adopted method, by the end of 2022, so this is the time to apply some influence.
One company that has adopted the PEF Method is Studio Anneloes. Jan-Willem van Loon, founder and owner, tells us about their motto: Fast Fashion done right. An important factor for this company is measuring their impact, which they do in cooperation with their long-term fabric supplier. Besides the impact of production stage, they consider the use of the product by the consumer, and the end—of-life stage.
In our discussion panel, our experts close the day off with a recap. Our Textile expert Anton Luiken also joins the group and tells about another way to measure the impact. This is our Modint Ecotool, which is designed for textile products and to compare different options. Please contact Modint for calculations of your own products!
Something everybody agrees on is the importance of communicating to the consumer about your sustainability goals, achievements and involving them. By making them understand, making them see what their own impact is and how they can make a difference. So, let’s speak up, and show the world the step’s we have taken!
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