Time for unity between RMG buyers and suppliers

One of the lessons that we learnt during Covid-19 is that suppliers and buyers need to collaborate more, moving away from adversarial relations. But how can we make the shift towards collaboration? And what are the barriers to such an approach to business?

Perhaps it makes sense to begin with the latter, and consider what is preventing closer relationships with customers. I'd say three factors have a prominent role to play here.

The first is the basic issue of trust, and that swings both ways. Many RMG manufacturers are naturally cautious about fashion brands and retailers. They may have had their fingers burnt in the past, perhaps during the cancelled order crisis in 2020, which damaged buyer-supplier relationships generally.

Likewise, buyers can be overwhelmed by the sheer number of vendors and the aggressive sales tactics that many see necessary to adopt in an over-crowded market. This can lead to reticence and caution on both sides.

The second factor is the ongoing disconnect between sustainability and purchasing departments at major fashion brands. I have no doubt that sustainability teams at most major brands recognise the need for more cordial relations with suppliers, as they understand that poor relations and purchasing practices can impact the well-being of RMG workers.

Is this message getting through to purchasing managers and buying teams? From my perspective, the answer is "occasionally." Some purchasing teams are better than others; some understand the need to incorporate sustainability metrics into their decision-making, while for others, it is all about the price.

The final barrier is broader and cultural: adversarial buyer-supplier relations have become the norm in our industry. That's why turning the tide on this issue has proven difficult so far, although there are some signs that things are improving—albeit very slowly.

So how can we address the above issues and forge better buyer-supplier relationships?

For a start, I believe we need broad industry alignment and a "vision" of what it means to do business in our industry in the post-pandemic world. We need to act now and stop making the same mistakes as in the past.

Perhaps an industry charter for collaborative working could be devised? In such a document, buyers and suppliers could both agree on and lay down their expectations when entering business transactions. Besides agreeing to the usual legal issues and terms and conditions, such a charter could also seek to reach broad consensus around pricing, negotiation, deadlines (and the need to allow reasonable deadlines), delivery, samples (whether they are free or paid for), and so on. At the moment, there is a lack of standardisation; industry actors make things up as they go along.

When there are grey areas, they lead to uncertainty, mistrust and poor working relationships. We are all losers in such a scenario—buyers and suppliers alike.

There is also an argument for having an industry steering group, comprising representatives from buyers, suppliers and independent stakeholders, to oversee such a charter and arbitrate when a buyer or supplier has stepped out of line. Such a steering group could also mediate on disagreements between buyers and suppliers over contracts and working relationships.

I am not sure that we need more regulations in the industry, as buyers and suppliers alike would argue that this would lead to more red tape and, if anything, make relationships worse. I am naturally cautious about "voluntary" industry initiatives as, in my experience, their impact in the past has been negligible. In an area like this, however, I think a voluntary approach is the best way forward and could have real impact, if the case could be made that all parties would benefit. In any case, something legally binding would be highly unlikely to get off the ground.

What we could aspire to, then, is a pact that the whole industry enters into with the spirit of cooperation and mutual benefit—an agreement to draw a line under the disagreements and arguments of the past, and which sets out a clear pathway for a future in which buyers and suppliers work for—and not against—each other.

Mostafiz Uddin is Managing Director of Denim Expert Limited, and Founder and CEO of Bangladesh Apparel Exchange (BAE) and Bangladesh Denim Expo.