Thinking Inside the Box

Time For An Audit!

There are those of us who live in fear of these dreaded words – We are going to audit you!

I am reminded of this for two reasons – it’s just past tax return time for many of us around the world and more importantly, the tragedy of the garment factory collapse in Bangladesh.

Bangladesh might not mean much to many of us, but it’s a country of more than 150 million people whose biggest export (more than 75 percent) is to the garment industry around the world. The majority of the garments are private label for some of the world’s greatest retailers. The recent tragedy, in which more than 100 people died, has led to calls for boycotts of retailers, international sanctions against the government of Bangladesh, and a major call on retailers to “get their act together” in conducting audits and surveys of everyone they do business with all over the world.

This has resonated everywhere and reminds us all of our responsibility to our suppliers, our customers, and the people that manufacture our products. It was a few years ago that a friend of mine from a major European retailer went to a certain country, to interview a certain audit company and review a certain year’s audit of a certain manufacturing plant.

The person involved pulled out two reports and asked “Do you want this year’s report or next year’s?”

We are all (or hopefully we are all) doing ongoing due diligence on our suppliers and keeping the audits up to date and verified. But where do they begin and where do they end? In Bangladesh, it appears that the building had been altered without approved plans. It also appears that the building was showing signs of dangerous cracks.

Do our audits include building integrity? Should they? If we audit a canned tuna supplier, do we also audit the production facilities? Do we audit the boats they are caught from and also the wharves where the catch is landed?

If we audit fresh sweet corn packers, do we audit the packing house, the trucks, the harvesters, the printer of the labels? How far does all this go? Or do we just front load our insurance coverage and hope for the best?

Clearly, it is time for every one of us to examine carefully our current management of product and people safety. Talk with your networks. See what other retailers are doing.

Ask conference organizers to get this topic covered at the next private label conference. It’s time we all gave this serious thought. For the people that buy our products, the people that make them and all the people that are involved right up and down the supply chain, wherever they may be. 

Till next time!

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