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Managing supply chain risks in apparel manufacturing

Our latest insights report looks at the social, ethical and environmental operating risks that affect the apparel manufacturing industry. These risks may affect the businesses and people working in this industry, related industries such as fashion retail, and the supply chain.

Our report on the apparel manufacturing industry is designed to help businesses and policymakers understand the risks to people and the planet within the sector, alongside Sedex’s recommendations for managing these risks.

Read the report

Apparel manufacturers are most commonly factories that produce and supply garments, either directly to large retailers or to wholesale suppliers (known as “agents”) that in turn supply to retailers. Garment production also occurs in informal home-based settings.

The clothing manufacturing industry employs more than 12 million people globally[i].  It is a core part of the fashion industry, which is the third-biggest manufacturing industry in the world[ii].

Global apparel market snapshot

Human rights and environmental risks in apparel manufacturing

Human rights groups, media and whistle-blowers frequently highlight social issues in the apparel manufacturing industry such as excessive overtime, low wages, poor access to social security provisions, verbal and sexual harassment, and forced labour[iii].

Data from the Sedex risk assessment tool highlights these issues, showing that many of the top 10 global exporters of apparel indicate as “high risk” for issues including forced labour and excessive working hours.

Complex global supply chains, insufficient enforcement of labour laws, and focus on low-cost production hinder brands’ ability to identify and resolve problems within their supply networks.

Undeclared subcontracting, homeworking and migrant workforces – all common in clothing manufacturing – increase the complexity of these supply chains.

The fast fashion model in particular comes with significant social and environmental risks. Items are low cost to consumers often at the expense of garment workers’ wages, increased pressure on production targets, and increased risk to their health and safety. Emphasis on high output uses vast amounts of natural resources and produces increasing volumes of waste and pollution.

Retailers, suppliers, governments and civil society must collaborate to manage risks and drive a sustainable apparel manufacturing industry.

Recommendations for businesses

  • Commit to responsible business practices. Develop a policy that defines your company’s commitment to operate in a way that respects human rights and the environment.
  • Support and sign up to a new Accord on fire and building safety. The Accord on Fire and Building Safety in Bangladesh, developed after the Rana Plaza disaster in 2013, has brought great progress in workplace safety. It expired in May 2021 – a new agreement is urgently needed.
  • Build supply chain visibility. Gather information on suppliers and their workers at all levels of your supply chain, to understand where more vulnerable workers are and consider their needs.
  • Develop a responsible sourcing strategy that prioritises activity by risk. Rank risks by severity and likelihood to help you identify your priority focus areas.
  • Collaborate with suppliers to resolve issues. When you identify an issue in your supply chain, explore all possible solutions with suppliers and work together to resolve these issues. Terminating a contract is unlikely to address any systemic issues that are occurring.
  • Partnership with Sedex. Sedex works with both buyers and manufacturers in the clothing industry to facilitate supply chain transparency and encourage responsible business practices. This includes sharing supply chain and audit data to help businesses improve working conditions.

Learn more: read the report