Our Approach to Ethical Sourcing
We currently work with only seven suppliers. The largest of which has been working with us for over nine years.
From the conception of our brand, our strategy was to source from a small number of suppliers, who shared our values. At the time, it was a struggle to find NZ orientated exporters who understood our ethical requirements. For this reason we made the decision to work with a specialist in international ethical sourcing, who could both guide and introduce us to their network of compliant factories with particular maturity around labour practises.
One of the factories introduced to us was a pioneer in the China garment industry with regards to their ground breaking project to effectively reduce excessive over time. Engaging and listening to their workers was key to the success of their project and was used as a best practise example in the industry in the mid 2000s. We feel very fortunate to still be working with this supplier and continue to learn from their approach. In fact it was with their guidance that we developed our buying process, ensuring adequate lead-times for the sample room and the main factory, as well as realistic quantities to optimise efficiencies and worker earning capacity. We know for a fact that the workers were consulted on some of our styles, which is perhaps a rarity in the industry. Our initial styles were rejected due to their complexity and therefore a barrier to those workers earning a piece rate. Establishing China production was a journey through a learning curve for us, but our willingness to listen and our openness to learn has contributed to the success of our brand. We are therefore committed to sharing our learnings with all our staff. We encourage and invest in travel to give our staff invaluable first-hand experience, and throughout their learning journey stress the importance of understanding and aligning their work with those of the people who make our clothes, without whom we would not have a brand.
A responsible approach is at the core of our business strategy and has driven our purchasing practices from the conception of our brand.
Listening to our suppliers, respecting agreed time lines as well as consciously negotiating fair prices are core values we expect from our team members and are now instilled in our processes. One of our biggest challenges has been to ensure transparency of supply base. From day one of our brand we have worked to find solutions to avoid buying stock fabrics, which cannot be traced to a mill. We actually build our ranges around fabric minimum requirements to be assured of the source. In retrospect offering capsule ranges in the same fabrications has contributed to the success of our brand as well as the integrity of our design – as our customers can be assured that the print they buy is exclusive to Loobie’s Story.
We have a generous buying cycle to allow at least 3-4 months for design and sampling, pre production quality processes as well as marketing and selling to our retail operators. We allow another 3 – 4 months for production depending on the product and one month for shipping and Warehouse QC checks. We are now old hands at managing China production peaks and national holidays. As a result, we always plan around these events to ensure we are not exacerbating the need for over time or for airfreight.
We are fortunate that we have built a high level of customer loyalty, and therefore our order quantities are reasonably consistent . This enables us to plan ahead and issue forecasts when requested. However, for the bigger factories, they are now confident of our intent and welcome our small volumes to fill production gaps which inevitably arise when other customers are late committing or fabrics have been delayed.
The majority of our negotiating is handled by experienced team members or by the owners themselves. Over the years we have been able to build a database of our product costs and therefore have an informed viewpoint to our negotiations. The truth is that with our volumes we also have limited leverage, and therefore are confident that our price expectations are fair and would not be accepted otherwise.
In terms of penalties for late deliveries – again our experience and long-term relationships come into play. Penalties are only followed through when offered by suppliers. Contrary to many people’s perceptions – in our experience China suppliers always offer if at fault and fortunately, due to our lead-times and collaborative approach it is not a common occurrence.
Our twice-yearly meetings are also key to our Loobie’s Story Buying Process, where we discuss each other’s business strategy, performance and expectations of each other for the next 6 months. It is only after these meetings we can confidently make order placement decisions based on supplier’s performance to our KPIs, which include social and environmental responsibility, as well as their available capacity. Our aim is always to grow our business with the better operators, however we believe it is also important grow our influence with the smaller factories that would benefit from investment in capacity building around social performance.
Due Diligence is a term commonly associated with risk management and a concept introduced by the UN Guiding Principles on business and human rights – a prerequisite for any Responsible Buying Process. At Loobie’s Story, we have been learning how to strengthen our processes and for sure have gone through a major learning curve. However, we believe we are in a better position as a result, the team are all on board and despite our limited influence we are determined to have a positive impact on the people in our supply chain.
Building awareness, and integrating risk assessment into our processes.
China is Loobie’s Story main sourcing market for garments, fabrications and yarns. For this reason our labour rights risk assessment is primarily focused on China although this will broaden as a result of our tracing project into the provenance of our raw fibres.
Our research draws from a number of sources and takes into consideration both country and tiers of our supply chain from raw fibre to finished product.
We categorise these risks into :
- Social: against our Code of Conduct as well as referencing specific socio and political influences.
- Environmental: against our 7 key concerns; natural resources, fossil fuels and carbon emissions, chemical and pesticide use, water use, waste management, energy consumption and animal welfare.
We continue to invest in team training to raise awareness of the risks, and we are in the process of integrating a process to identify risks for all our new purchases.
Communicating our Code of Conduct
Loobie’s Story has adopted the ETI Base Code with additional clauses around gender equality which align with our internal policies, as well as additional clauses around modern slavery risks associated with a temporary, contract or migrant labour and labour brokers and recruitment fees.
This code is internationally respected and therefore familiar to the factories, which was an important consideration when establishing our code, having witnessed so many confusing variations on factory notice boards.
ETI Base Code of Conduct is based on the ILO Four Fundamental Principles and Rights of Work:
- Freedom of Association and the effective recognition of the right of collective bargaining.
- Elimination of all forms of forced or compulsory labour.
- Effective abolition of Child Labour
- Elimination of discrimination of employment and occupation
Our Code must be signed as part of our Terms and Conditions, and must be displayed on the employees’ notice board in both English and in the Chinese translation we arranged. We also insist that Loobie’s Story brand name and email is on full view to encourage workers to contact us if they have any concerns regarding compliance to the Code of Conduct.
Monitoring Suppliers Performance
Whilst there is much debate about the effectiveness of audits, we believe they are key to establishing some of the immediate risks. More important however is working through the remediation plans to ensure suppliers are taking the findings seriously and working towards continuous improvement.
To ensure we are on top of all the remediation plans and factory progress, we have employed a part-time team member who is experienced in working with China and reading audits. Understanding the practicalities of achieving continuous improvement goals is critical in discussions with suppliers. Knowing when to challenge, when to compromise and when and what to offer for advise and support is key to successful collaboration.
The majority of our factories have been working with various audit methodologies for many years, namely BSCI and Sedex’s SMETA which are carried out by specifically trained auditors who themselves are audited to ensure ongoing integrity and professionalism. Both of these methodologies are considered internationally acceptable and are both comprehensive in checking adherence to our own Code of Conduct. Audit companies used are Intertek, TUEV and SGS. We will only accept audits that remain valid within their required time frames – which for us are a minimum of one audit every 2 years. However, in most cases they are every 1-year.
For our smaller factories or any potential new factory that we are considering working with we have an ongoing process which includes reviewing existing audits, carrying out a detailed factory visit plus if no valid audit is available we arrange a pre audit visit by our on the ground factory / audit specialist who can assess any risks, establish our level of influence and give advise for any remediation needed before we would be willing to trial their production.
Working towards transparency
We have 100% transparency of our tier 1 suppliers and are now working towards greater transparency of our fabric suppliers and beyond. Our garment suppliers are expected to pass on our Code of Conduct to all their suppliers, including the fabric mills and spinners, laundries, accessory suppliers and subcontractors.
Copies of signed code of conducts documents as well as up to date audits are kept within our factory mapping platform to give us up to date and absolute transparency of our supplier compliance status.
We have a zero tolerance policy to subcontracting and have communicated this to our producers from the start of our relationships. In fact it was with this in mind that during the development stage of Loobie’s Story we sat down with potential suppliers to work out a buying calendar that would eliminate any need for subcontracting due to time pressures. We continue to review and adjust this calendar and adapt our product launches around realistic time lines for each fabrication and yarn type.
Building Long Term Supplier Partnerships
We view our suppliers as our partners, and will only introduce a new supplier if our current supply base cannot support us, and if we see this as a long-term opportunity. We personally visit our suppliers and factories twice a year. These visits are invaluable in terms of sharing our latest story, clarifying our expectations and hearing about the progress and challenges our suppliers are facing. The reality is that as a small brand with limited leverage, we have to listen to our suppliers and believe this has been integral to the success of our business relationships.
Additionally, visiting our suppliers gives us the opportunity to meet the people who make our clothes as well as seeing first hand their working conditions. We believe this is critical to fully understanding the bigger picture and complexities involved, as well as to open the eyes of our team to the realities of working in a factory.
The Loobie’s Story team recognise the need to collaborate on the more complex and systemic issues that we cannot resolve on our own. For the more serious issues we have adopted remediation guidelines as recommended by experienced practitioners, and have a database of contacts for support. We will always seek to work in partnership with our supplier and qualified organisations, NGOs and civil societies to develop the responsible solutions that the experts believe are in the best interests of the worker/s involved.