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Open-Source Data Could Fix Fashion’s Supply Chains. Here’s How

Nobody should die for fashion. Yet apparel supply chains continue to make headlines for their shocking treatment of staff. Reports suggest that workers for global brand suppliers have been locked in factories, sexually harassed by managers and, in the case of Jayasre Kathirvel, murdered.

Mending the fragmented structure of fashion’s multi-tiered production networks requires unilateral thinking across all stakeholder groups. How can organisations strive to improve the environmental and social conditions of their suppliers’ facilities, if they lack even the basic knowledge of where these factories are located?

Cue open-source data – the solution that gives impetus for information sharing. Freely accessible, shareable information is becoming an essential part of the data landscape, especially when it comes to mapping sustainable supply chains. A new group of organisations and non-profits are championing the power of open-source data in the pursuit of transparency and traceability.

Legislators call for supply chain transparency

The global market potential for open data could be as high as $5 trillion, according to McKinsey and the Open Data Institute. Unlocking this economic value is not limited to the apparel industry alone but also extends to oil and gas, electricity, health, and transportation sectors.

In addition to market demand, policy makers have introduced regulatory obligations on supply chains and procurement risks. Heightened policing on labour conditions means that transparency and traceability will no longer be optional ‘nice to haves’. Similarly, flagrant disregard for systemic human rights abuses across manufacturing now has considerable repercussions. This is highlighted by the US ban on all imports of cotton and tomatoes from Xinjiang, China, following the widespread forced labour of the Uighurs. In Europe, the new draft of the German Supply Chain Act and United Kingdom’s Government proposal to strengthen the 2015 Modern Slavery Act has amassed further calls for mandatory due diligence, which can be enabled by open-source data.

A culture of access, coupled with the digital revolution, could mitigate the information barriers that currently exist surrounding factory and supplier lists. The value of sharing these insights with other stakeholder groups, including competitors, can provide granular detail that looks beyond direct first tier networks to identify shadow facilities and subcontractors.

Grappling with these data gaps matters because, ultimately, lives are at stake. With garment workers in Ethiopia recording monthly earnings for as little as $26 in 2019, modern slavery persists.

Unlocking the value of open-source data

To solve these issues quickly, organisations can no longer afford to work in silos. Tracing the provenance of garments from end-to-end of the supply chain demands knowledge and data sharing from all actors, including brands, suppliers, NGOs and industry bodies. By disclosing previously private lists of supplier factories and third-party production facilities, industry actors can collaborate to monitor these sites. Open-source data allows parties to understand compliance risks and create a positive feedback loop with stakeholders on the ground to remedy social and environmental malpractice.

Efforts thus far have been aided by technological and software developments in the real time tracking of production. This has improved the quality of data insights available to share throughout the entire value chain. These observations can subsequently enable brands to work rapidly to rectify issues that occur in supplier facilities. What’s more – a greater level of disclosure could increase the level of responsibility of these organisations as they are publicly held to account for their operations by law.

There are numerous secondary benefits of openly sharing this information. Brands can leverage their new levels of transparency to build trust with customers who have become increasingly wary of greenwashing and hardwired to scrutinise the provenance of their garments. Recent research revealed that a mere 18% of citizens would trust sustainability information provided directly by brands themselves. Third-party verification through open-source data bases could mitigate the trust deficit. The monetary incentive adds further weight to the argument as 73% of customers state they are willing to pay more for products that guarantee total transparency, if done so authentically. Indeed, fashion brands who seek to share their data with citizens may be able to build trust, improve their intangible assets and improve sales performance.

Open-source data in action

Translating supply chain data into democratic, usable and safe platforms is no small feat, particularly if it is to bring elevated levels of transparency to the world’s apparel supply chains.

The Open Apparel Registry (OAR) is testament to how this can be done. As an open-source, neutral and publicly accessible data base of facilities in the apparel and footwear sector, the OAR now holds information on over 57,000 facilities, spanning more than 120 countries. Hundreds of organisations have contributed to this database, ranging from factory groups, multi-stakeholder initiatives and civil society organisations, through to household names like Adidas and Hugo Boss. The OAR collates these global factory lists into a single map and assigns each site with a unique 15-character OAR ID using a sophisticated algorithm.

Chief programme officer Katie Shaw notes that organisations of any size can benefit from the better-quality facility name and address data provided by the OAR. Smaller fashion brands such as Ganni and Ted Baker “value understanding the connections facilities shared with other organisations, as it helps them think through potential collaborations and also gives them insight into who to contact to understand potential risks when sourcing from new geographic regions.”

Shaw underlines the importance of neutrality for open data: “Positioning the tool as a neutral entity built for the benefit of the entire sector is key to its success and building trust”. The OAR’s multi-stakeholder board and non-profit status highlight that governance structures and the management of open-source data must be thoroughly considered because stakeholders may not always be willing to share their data with organisations with vested interests.

The tool’s dynamic technological capabilities, such as the OAR’s Application Programming Interface (API), can drive interoperability between siloed datasets. This can positively impact fashion’s energy, water and chemical management with the potential to eradicate toxic substances from supply chains. For example, the OAR works with ZDHC, the organisation dedicated to reducing the industry’s chemical footprint, by integrating facility OAR IDs into the ZDHC gateway. “This integration leads to improved insights about facilities, expediting collaboration between brands and facilities, and progress towards more sustainable chemistry,” says Shaw.

On social issues, when supplier Codes of Conduct have been violated, the OAR has been used by the likes of the Business and Human Rights Resource Centre to rectify cases of workers’ rights infringements. While still in its relative infancy, the tool has been favoured by over 79 brands who are collaborating to stamp out social injustices.

The long-term vision of the OAR is to become “the central source of truth” in the industry to facilitate supply chain improvements. Having received an initial injection of $1.7 million from 2017 – 2020 from the Laudes Foundation to launch the tool, the non-profit has now embarked on a new five-year grant cycle with the Foundation worth $2.4 million to scale its mission. Future developments for the platform include paid-for services such as embedded-map plug-ins and evolving the functionality of the tool in-line with user needs.

Building new filtering options, like searching the database by closed facilities, underlines how the OAR are quick to react to the ever-changing nature of fashion’s manufacturing sites and supply chain trends which have been unduly impacted by the global pandemic.

Another organisation leading the charge in open-source data management is US-based Sourcemap. Founded in 2011 by Leonardo Bonanni, Sourcemap exists to provide organisations with insights into the end-to end of supply chains to ensure that social, environmental and compliance standards are met. Sourcemap has become a trusted solution used by the likes of Ferrero, Mars and Beauty Counter to trace and disclose supplier information. Other users include VF Corporation, which owns brands that include The North Face, Timberland and Vans. Together, Sourcemap and VF Corporation have worked to publicly share their extensive tier 1 – tier 4 supplier information. Founder and CEO Leonardo Bonanni sees infinite value in doing so: “Supply chain transparency is the best way for a brand to stand out and make sustainability claims that can be trusted.”

The Open Sourcemap, has become one of the world’s largest directories of open supply chains at a brand and product level. These verified and official supply chain disclosures trace the provenance of iconic items like Jansport’s backpack by material suppliers, textile mills, factories and distribution centres. Accompanying the visually mapped data points are specific features relating to recycled materials, water and energy efficiency as well as worker and community development. Icons signal to viewers which facilities are using which practices. Bonanni notes that these official disclosure pages are the largest driver of traffic to Sourcemap’s website, demonstrating that the demand for transparency is certainly there.

Requests for Sourcemap’s open-sourced supply chain solutions have increased twelvefold in light of recent legislative developments, including the US customs ban on products made with forced labour. “We’ve seen unprecedent demand – this quarter was the biggest in the company’s history and not just for the apparel sector but for other industries too including automotive, chemical and agriculture,” says Bonanni, who recently spoke to the US Senate Finance Committee hearing on fighting forced labour.  

How can we persuade more fashion industry players to increase their level of disclosure beyond the first tier of the supply chain? Bonanni points to the power of citizens, “By communicating how much fair supply chain practices matter to them, it will give the brands the motivation they need to increase their supply chain transparency.”

Indeed, even global brands are rising to the occasionally uncomfortable challenge of disclosing their manufacturing maps. Sportswear giant Nike provides regional level data on factories, workers and types of products made – all information which is publicly available to download.

Obstacles for open-source data

The limitations to open-source data are the perceived risks of publicly sharing supply chain information. Leaning in to transparency means brands must face the music and be open to scrutiny of their sourcing practices. This level of surveillance will come from both inside and outside of the industry as citizens continue to distance themselves from irresponsible retailers.

Open-source data is currently hindered by the belief that sharing sourcing information could risk the loss of competitive advantage. Smaller and medium-sized brands at critical growth stages may be apprehensive about divulging details of the facilities used in their supply chain to others, especially if they were to reveal cost saving or reduction in lead time opportunities.

The time lag in the mindset shift towards a culture of access could also slow the uptake of using open-source data and mapping tools. That is why creating evidence through organisations like the OAR and Sourcemap is imperative to build the business case for information sharing.

For those unwilling to share, brands could argue that disclosing open-source data is not essential for commercial success. The case of fast fashion giant Boohoo, who recently reported an increased revenue jump of 41% profits to £124.7 million from 2020-2021, despite last year’s factory scandal, is a prime example.

Brands must start sharing data if they are serious about sustainable supply chains

Where do we go from here? There can be no doubt that the global pandemic has sparked a shift in apparel supply chains. Brands are consolidating their supplier base to mitigate procurement risks and are engaging in nearshoring, opting for factories closer to home. What’s more, global trade tensions between the US and China have caused a rise in popularity for manufacturers in countries like Vietnam. This modification to fashion brands supply chains means that now, more than ever, open-source data should be used to trace these dynamic multiple tiered networks.

In the future, could public money from central governments fund the innovation of repositories of open-source information like the OAR and Sourcemap? One would hope so. A multi-stakeholder approach to the management of open-data platforms will ensure information is managed safely and responsibly. This collaboration could also foster important discussions about how to measure and report on the impact and how to overcome challenges relating to the corruption of facilities audits.

Encouraging policy makers to transform voluntary fashion initiatives into mandatory compliance could benefit the sector exponentially. Initiatives such as the The Transparency Pledge, which holds brands accountable by asking them to publish manufacturing facilities, could be bolstered through legislation.

This sharing imperative feeds into the wider concept of the Open-Source Circular Economy movement, cited in Kate Roughton’s Doughnut Economics. By collaborating with competitors to share facility data, fashion companies could subsequently feel more comfortable in disclosing details on new innovations that could propel the industry towards a sustainable future. Take, for example, the Allbirds open-source life cycle assessment tool or Levi’s open-source water innovations. This culture of access inspires engagement across all stakeholder groups to work collectively in a bid to align operations to a 1.5-degree pathway, operate within planetary boundaries, and stamp out slavery.

It is clear that now is the time for radical collaboration. The climate crisis and interconnected socio-economic challenges are shared by all of us and the solutions must be shared, too. As Leonardo Bonanni states, “some of the most important social and environmental problems in the world can only be solved once the market rewards good supply chain actors.” Open-source data may help to do just that.

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