Better buyer-supplier partnership is imperative now amid transition as industry rides out corona aftershocks, says a survey report about the means of reinvigorating the global apparel market.
The quality of buyer-supplier partnerships in global supply chains has only slightly improved since last year, indicating that suppliers are still feeling the impact of disruption more than two years on from the onset of the Covid-19 pandemic, according to the report on Better Buying Partnership IndexTM (BBPI) score for 2022.
Business stability or steady-work-across-the-year scores declined by 6.7 per cent and the visibility buyers provide to suppliers down by 2.4per cent last year compared to 2021, according to the latest findings.
"Buyers cannot let up their focus on maintaining business relationships with suppliers," it says, recommending strong communication practices as a key tool in buyer- supplier partnerships as the industry continues to ride out the aftershocks of Covid-19.
The overall BBPI score for soft goods increased by one point from last year (40 in 2022, compared to 39 in 2021). The share of true partner, collaborator, and detractor ratings stayed roughly the same.
The BBPI Index, launched Thursday by Better Buying Institute that reimagines supply-chain sustainability, leveraging data to strengthen supplier-buyer relationships and improve purchasing practices that drive profitability while protecting workers and the environment.
Better Buying's programmes provide retailers, brands, suppliers, and industry with data-driven insights to help drive lasting improvements in global supply chains.
The purchasing practices of 160 buyers, including big-name C&A Sourcing, H&M, Inditex, Bershka, Walmart and Zara, were rated by suppliers from 54 countries-24.1 per cent from China followed by 8.7 per cent from Bangladesh, 7.8 per cent from Hong Kong and 6.7 per cent from Turkey.
Most of the 2022 ratings (96.8 per cent) were for soft-goods buyers that included buyers of apparel, footwear, and household textiles while the remaining 3.2 per cent for hard-goods buyers such as that of toys, electronics, furniture, kitchenware, home appliances, sports equipment, and others.
On the positive side, small gains were seen in a number of areas compared to 2021, including the extent to which buyers make efforts to reduce duplicative audit requirements (up 4.2 per cent), the fairness of buyers' financial practices (up 4.1 per cent), and buyers' efforts to improve working conditions in their supply chains (up 3.3 per cent).
There was also a 2.1-percent increase in the number of suppliers reporting that a buyer was a preferred partner.
There was also a small and emerging trend in the use of technology to improve operational efficiency, communications, and other aspects of buyer-supplier partnerships.
This suggests suppliers' expectations of how they engage with buyers might be changing, and provides opportunities for buyers to identify and implement technologies that could strengthen their supplier partnerships.
Brands and retailers who subscribed to the BBPI in 2021 and participated again in 2022 improved their overall BBPI score by an average of 3.0 points. One repeat subscriber improved its overall score by 10 points.
BBPI is an effective tool for measuring partnership quality, identifying areas of improvement and tracking performance over time, says Dr Marsha Dickson, President and Co-Founder of Better Buying Institute.
Today's findings underpin how important it is for brands and retailers to maintain strong communication with suppliers as the industry continues to ride out the aftershocks of Covid-19, Ms Dickson adds.
"The inventory challenges being experienced today demand much better communication than what has been the industry norm, and the decline in business stability compared to last year is a warning note we can't afford to ignore, given what we know about the connection between unstable business and ordering on the part of buyers, and factory-level non-compliances," she said on the occasion of report launch.
Brands and retailers are encouraged to subscribe to Better BuyingTM and to take advantage of disaggregated reporting to dig deeper into partnership quality with suppliers in different regions, product categories, and other segments of their business.
"BBPI subscribers who also subscribe to the Better Buying Purchasing Practices IndexTM will gain valuable insights for how to improve in all areas of their purchasing practices, and are likely to see the most improvements," she noted.
When asked, Abdullah Hil Rakib, director of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said they are affected by the unstable business and forecast or absence of enough information mainly because of the volatile global situation.
"The war and the inflationary pressure causing power crisis and disruption to supply chain and logistics have reduced the flexibility of the end customers, resulting in unstable business and visibility," he noted.
Exporters say routine forecasts or projections help suppliers to have future planning, review business operations and propose their capacity accordingly.
