The length of relationship between buyers and suppliers has little impact on the nature of buying practices, according to a latest report.
Besides, the majority of suppliers -- 60 per cent -- are not incentivised for being compliant with buyers' code of conduct though it indicates that incentives are essential for improving purchasing practices.
"…it doesn't matter whether buyers have had relationships with suppliers for one, five or even 20 years, suppliers experience generally same purchasing practices," the report said.
Better Buying, supported by C&A Foundation and Humanity United, on May 22 launched the report titled 'Better Buying Purchasing Practices Index (BBPPI)'.
Designed to support industry efforts to improve purchasing practices in supply chains globally, it rated purchasing practices of 65 leading brands and retailers.
Better Buying uses data submitted anonymously by suppliers through its online platform to rate purchasing practices of buyers in the apparel, footwear and household textiles industries globally.
Better Buying is an initiative that supports industry-wide transformation of buyer purchasing practices to ensure business relationships allow buyers and suppliers to achieve their financial, environmental, and social sustainability goals.
Better Buying Co-founder Marsha Dickson said, "Current business practices are unsustainable and need to be overhauled if we expect companies to achieve financial, environmental, and social sustainability goals."
Brands and retailers must provide their suppliers with predictable business, sufficient lead times, fair financial deals, and incentives for compliant factories, she added.
BBPPI empowers suppliers to share concerns about poor supply chain management and the issues they face.
Doug Cahn, Better Buying co-founder, said: "BBPPI supports brands and retailers, multi-stakeholder initiatives, investors and other stakeholders looking to improve purchasing practices."
"Rather than assessing the policies and procedures of buying companies, it instead measures their impact on suppliers using confidential data-driven surveys," he added.
The benchmark report summarises the results and key findings from the first cycle of BBPPI data collection carried out in the fourth quarter of 2017.
It included ratings from 156 suppliers across 24 countries and measures the performance of 65 buyers.
Buyer performance is measured against seven key categories of purchasing practices: planning and forecasting, design and development, cost and cost negotiations, sourcing and order placement, payment and terms, management of the purchasing process, and CSR harmonisation.
BBPPI finds room for all companies to improve as well as evidence of good practice.
The average overall Better Buying score for buyers was 2.5 out of 5 stars, meaning that kinds of practices suppliers face result in significant challenges, the findings revealed.
In most cases, suppliers were paid on time and at the price agreed upon (4.5 out of 5 stars for payment and terms).
The worst-performing category was sourcing and order placement with an average of zero.
It meant that suppliers were not rewarded for compliance with their code of conduct and legal requirements and received highly inconsistent order volumes from month to month.
Buyers scored better where they had a direct relationship with the suppliers rating them compared with buyers using a third party.
It was reflected in overall Better Buying scores, cost and cost negotiations, and management of the purchasing process categories, according to the report.
Acknowledging the report findings, Fazlul Haque, former president of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), said maintaining the code of conduct is a prerequisite but suppliers don't get any benefit for being compliant.
"We might have good relations over the years, but it really doesn't have any impact on buyers' buying practices," he added.
munni_fe@yahoo.com