A Model Factory

I'm in Jakarta again, this time visiting some factories we currently work with and assessing some others that are not yet approved for my company. It's unusual for me to get the chance to visit factories we're not yet working with and I'm learning that representing a potential client feels very different from playing the role of the social compliance guy who comes into a factory to see what's unacceptable.

The main difference is that factory management really directs their comments to me, the company representative, instead of the social compliance auditors who usually lead the factory tour. Management is eager to show me innovative practices, sparkling new machinery and practices that might set them apart.

The first factory we visited yesterday was one of the best I've seen from a CSR perspective. The factory managing director was eager to share with me some of the community investment work it has implemented, some at the behest of a customer, but others that it initiated to fulfill business and community needs it identified. Some of the highlights to me included the following practices:

CNG Power - Apparently, Indonesia sits on a huge pool of natural gas, so this factory converted its power supply to compressed natural gas. The factory has realized tremendous cost savings due to this transition and mentioned that the amount saved was so significant that they could not reveal how much it was!

Wastewater Treatment - Years ago, the factory realized it was having a negative impact on the environment when blue geese were appearing nearby, due to the dyestuff in its effluent. Since then, the factory invested in an on-site wastewater treatment facility that ensures all effluent is free of chemicals and harmful dyes.

Infant Mortality Campaign - Apparently, the region where this factory is located has one of the highest infant mortality rates in the country. Factory management found that some women workers would get pregnant, go on maternity leave and their babies would die. The women would suffer from extreme emotional devastation, return to work once their maternity leave was finished, then immediately try to get pregnant again, resulting in less productive workers and the potential of another few months out of the office. To combat this, the factory has embarked on an extensive infant mortality campaign, that includes not only education, but also training and nominating capable midwives for factory workers. The factory has seen great success in reducing workers' infant mortality rates, and continues to find benefit from this investment.

Community Health Clinic - After the factory realized workers would take time off to care for their sick husbands and family, it invested in a community health clinic that provides healthcare services at a substantially reduced cost. The clinic is used by factory workers, their families and others in the nearby community - a visible symbol of the factory's commitment to the community.

Outreach to NGOs - One of the most surprising initiatives is the factory's proactive outreach to local, national and international non-governmental organizations. It's tough to get large multi-national corporations to understand the potential benefits of partnering with NGOs, but this one factory already has seen the power of learning from civil society organizations.

There were some other initiatives that puts this factory among "best in class" in my mind, but what I was most impressed by was the factory manager's attitude toward these initiatives. She understood both the business and social/environmental benefits of these programs, realized where her team did not have expertise so brought in the right community partners and eagerly searched for additional ways the factory could support its workers and community.

If only more factories took this approach, I might be out of a job! But the world would be a better place.

Health Enables Returns

Thursday was one of those days that reminds me why I love my job. I spent the day in a factory outside of Ho Chi Minh and we kicked off a new initiative with the factory: HERproject. An initiative of BSR, HERproject uses a factory-based peer-education model to improve women's health outcomes.

Essentially, factories invest in health education so that female factory workers gain a better understanding of reproductive health, nutrition and sexually transmitted diseases, among other health issues. In turn, factories experience lower absenteeism rates, reduced turnover and higher productivity, thanks to healthier workers.  And investing in women has impact beyond just those who experience the health training. Women take what they learn, apply it to their families and help to uplift entire communities.

I spent the day with factory management, BSR staff, representatives from our buying agent and the local Vietnamese NGO that will be delivering HERproject training and we discussed the plan for the upcoming year. It was simply one of those meetings where everyone walks away brimming with hope and excited for the possibilities.

After the meeting, we had a chance to tour the factory, meet some of the workers who would be participating and discuss additional outstanding issues. The factory tour also proved illuminating because it is a very well-run and organized facility.  It's one of the nicest factories I've ever visited, so I'm glad we've chosen a high-performing partner to launch this initiative with.

My company is proud to invest in this project and I feel lucky that I got to participate in the kick off.  In addition to this facility in Vietnam, one factory in Bangladesh is also implementing HERproject with our sponsorship. As we monitor the performance of these projects, I'm hopeful that we will be able to demonstrate both health benefits and business benefits so that we can continue to launch similar initiatives with other high-performing garment factories in our supply chain.

The Independent, Third-party Factory Audit

We employ a third-party social compliance audit firm to conduct social and environmental audits of our factories. In some cases, the purpose of these audits is to check our primary auditor's performance and in others, we rely entirely on these third-party audits. Through using a third-party audit firm, we aim to introduce a neutral party to avoid conflicts of interest and to ensure that we bring in an impartial perspective that does not have a financial stake in our relationship with the supplier.

On Friday, I accompanied our third-party audit firm for a shadow audit in China. It was the first time I'd visited a factory with a neutral party (instead of a company-appointed representative or a company employee) and it proved to be fairly educational.

From the outset, the tone of the visit was very different. Usually, auditors have a pre-existing relationship with factory management. The auditors have been to the factory before, they've worked together over the years and it's a collegial, if not friendly, relationship. With a third-party audit firm that has no previous relationship, the visit has a much less friendly tone.  It's strictly professional and both sides clearly are assessing each other throughout the visit.

The factory staff seemed much more nervous than on other audits I've shadowed. It could have been because this was the first time we had ever asked the factory to be audited, or it could have been my presence, representing a customer. Whatever the case, the entire day took on a much more formal environment than I was used to.

When it came time for lunch, the factory management team offered to take us to lunch, but our audit firm steadfastly refused. Typically, I will break bread with the factory managers to build our relationship and to discuss matters like production levels, hiring challenges, compliance issues, etc. in a more casual setting. Our audit firm has a policy to have lunch on its own, again to avoid any conflicts of interest.

And in the closing meeting, when we typically discuss next steps, corrective action plans and timing for implementation, we ended up pointing out the violations we'd found and leaving it at that.  We cannot guarantee that the audit firm will return to ensure that the corrective action plans have been implemented. In some cases, companies will send their own representatives to ensure follow-up. In this case, we could only say what we'd found and the conversation never turned to remediation or true improvement.

Friday's visit really highlighted for me some of the shortcomings of the third-party audit system. I still believe they play an important part of any social compliance program, but to rely completely on them would probably not truly work toward improving factory workplace conditions.

The Travel Bug

Friends, I apologize for my lack of posts, but I've been all over the place during the past few weeks. Part of what I enjoy most about my job is the opportunity to visit different parts of the world and learn about communities and cultures to which I've previously had no exposure. But when you have those moments when you wake up and your first thought is, "Wait, what country am I in again?" it may be a bit too much.

So, to make writing this post easier, I'll organize my recent travels by location:

Istanbul, Turkey
After a long night of flying, I arrived in Istanbul with several of my Supply Chain colleagues for a vendor summit. We've been working with more and more vendors in the Middle East and Mediterranean region, so we decided to host a formal day where we could get to know each other better.

Representatives from about 30 vendors, suppliers and partners showed up and we gave them a thorough overview of our business, our brand and our supply chain strategy. I spent some time discussing our factory compliance program and shared with them the CSR vision and strategy I've been working on. It's not quite "approved" yet, but it was great to explain to our partners that CSR will be more than just compliance. Our company will be looking for ways to create value from CSR and it's essential our partners understand where we're going.

Casablanca, Morocco
After the vendor summit, four of us traveled to Casablanca and visited a number of factories around Casablanca. We've already been working with one of the factories, but this was an opportunity to tour new factories to see whether or not they have the capability to work on our product. From my perspective, I had the chance to see factory working conditions firsthand and provide my input into potential suppliers.

Furthermore, meeting with Moroccan factory owners gave me the chance to dive into a strange Moroccan labor law with which I was pretty unfamiliar. The law has the potential to negatively impact overtime payments, and in extreme cases could be perceived as a form of forced labor. But because it's the law, we have to work with our suppliers to understand ways to make sure workers fully understand their rights.

Amman, Jordan
Continuing on our tour of potential factories to work with, we headed to Jordan to tour several factories. From a social responsibility perspective, I concentrated mostly on the topic of foreign workers - people who have come from other countries like Bangladesh, India and Sri Lanka to work in Jordan for several years. These foreign workers are especially vulnerable to discrimination, abuse and potential cases of forced labor, so it is important for us to learn more about how we can protect their rights.

Biella, Italy
After visiting factories, we headed further upstream and met with textile and yarn suppliers in Italy. For me, it was an education in seeing how yarn is spun from wool and how fabric is woven from threads. It was pretty fascinating and I learned a lot about the impacts that our upstream suppliers have.

One of the most interesting things I got to see was a fully automated dye house. Dyeing yarn can be one of the most toxic and environmentally unfriendly processes, but this particular facility had a state-of-the-art, computerized contraption that required only one person to operate the entire process. And thanks to technological advances, it not only limited human exposure to toxic dyestuffs, it also used less water to dye yarns and highly curbed the amount of effluent released by the process.

New York, NY
After a few days at home and back in the office, I headed down to New York to visit employees in our New York office. My main purpose was to meet with members of our Marketing team and to meet with a consultant, but I easily filled my time there with additional meetings on a variety of topics.

It's always good to meet with my colleagues face-to-face and a quick trip to New York is always worthwhile to build relationships.

My friends and family get excited when I talk about upcoming trips, but to tell the truth, I didn't have any time to do any sightseeing in all the countries I visited. Over the course of two weeks, there were only three days where I wasn't on a plane, and when I wasn't sleeping or visiting our partners, I was usually in a car or a van, traveling from one point to another.

I guess this means I'll have to go back to visit these countries and save some time to actually see some of the sights!