primark supply chain strategyprimark supply chain strategy
"Although, at this point, the disruption is causing limited availability on a small number of lines, our warehouse . . 95% of our manufacturers are based in Italy. Average farmer profit increased 247 percent during its third year. We have to find a way of explaining to the customer not to make that assumption, as price is not an indication of good or bad ethics. In France, employees also complained of difficult working conditions in Primark, with complaints ranging from unpaid sick leave, to constant monitoring, to unexplainable gaps between sales assistants' wages 5. Photo: Primark Gent opening Belgium via AFP. The project collects comprehensive and accurate data on factories across Bangladesh the names, locations, numbers of workers, product type, export country, certifications and brand customers and disclose it in a publicly available online map. However, although fast-fashion retailers like Primark have been working hard to improve working conditions and dramatically decrease their impact on the environment, in reality they have been unable to match their sales gains with corresponding improvements in terms of the social and environmental aspects. REWARD. Primark's supply chain, and indeed business strategy, is based on a highly efficient sourcing model whereby it aims to get products from initial design concept onto shelves in as little as six weeks, with merchandise sourced from all four corners of the globe. As a globalization strategy, Primark carries out its operation in 61 countries. But for us it's all about making fashion affordable at a value people can afford. This technology is still in development for the process to work at scale, but there is exciting potential here for a large reduction in garments being sent to landfill, and the decreased use of virgin raw materials. She encourages Primark to start looking into future options for implementing a circular economy, similar to the goal set by rival fast-fashion retailer H&M. Primarks margins are also said to half a high as those of its fast-fashion competitors. However, in spite of the numerous initiatives Primark has undertaken to combat its chemical usage, the value retailer may not be able to reach its Detox commitment to Greenpeace by 2020. It can help with this initial scoping phase of strategy development. Yet it is also a challenge for garment and textile companies, who consider their competitive advantage to lie partially in their unique supply chain decisions for example, where they are placing orders, prices paid and forecasting. One of the many places that Primark gets its cotton from is Gujarat in India. Fashion supply chains tend to be very long and complex, involving thousands of workers across the board. Primark adds that it does acknowledge the inherent challenges in defining and calculating a living wage, but it believes that a negotiated approach remains the most practical and sustainable move and supports the development of all industrial strides taken to achieve this. The training focuses on denim and jersey production, paying attention to the environmental impact of the main technologies used during the dyeing and washing processes. In short, we were looking to decrease the cotton farmers input costs, but increase yield of cotton and income and improve their overall lives and health, continues Stewart. There is pressure from outside organisations to set targets as soon as counting begins. While Primarks work does show that the retailer is committed to improving wages for its garment workers, the value retailer seems to be stuck at the strategy level and research stage and has yet to begin developing long term building blocks to paying livable wages. Prospect Analysis Stores at Primark Primark is experiencing "limited availability" on some of its product lines due to supply chain disruption, the retailer's owner has said. It is a shame that so much hard work of workers worldwide ends up as waste, Tara Scally, Dutch Campaign Coordinator for Clean Clothes Campaign (CCC) 11. The incident came just months after it emerged that Primark clothes were being made in India by factories using child labour. Our engagement with . It has stores across Europe and in the United States. The one in the UK, which covers all our European stores, is Newlife 8, a foundation which supports children who are either terminally ill or very physical disabled, explains Stewart. The value retailer disagrees with this opinion, as Stewart says Primark has invested a lot in improving the quality of its garments over the last few years. However, Primarks sustainable cotton programme is not its only initiative in place aimed at empowering and educating its female garment workers. Photo: Workers sewing in Indian Garment Factory. Garment brands should use their power to make sure union members are protected., Primark does what it can do to help workers employed without the proper legal papers, but in the case of undisclosed sub-contracting, where approved suppliers outsource production to unapproved factories which use methods of forced labour, the value retailer takes decisive action, as it takes any breaches extremely seriously. Over the years Primark has ensured that they work with local organisations in all of its sourcing locations in order to create a support net for any employment challenges that may occur, according to Stewart. In addition, Primark also works with the ILO Better Work Programme 4 in countries such as Vietnam, which aims to help factories meet and uphold international working standards. Off-site worker interviews by trusted organizations will more likely reveal the truth than company organized visits.. This short film shows how Primark's programme in Bangladesh has help provide essential health, hygiene and nutritional education for garment workers. Twelve factories have already benefited from the programme to date, and an additional seven are currently benefitting from the PaCT training through Primarks nominations. It can also be used to drive down operational cost and maximize efficiency within your supply chain. The value retailer was even awarded the Carbon Trust Energy Standard 1 in recognition of its continued commitment to energy efficiency in its stores in 2014. But the lack of transparency Primark has concerning its supply chain and workers is still problematic for many organisations. Primark is using its global scale and reaching across its entire supply chain and its own operations to action the new strategy with nine key commitments, through three key areas. To maintain this strategy Primark always focuses on buying, logistics and supply chain management. Its not something new, its business as usual and we have been doing it for a very long time. In September 2015, an ACT delegation, which consisted of IndustriALL and leading representatives from Primark, H&M and Inditex travelled to Cambodia to meet with suppliers, garment unions, the Labour Ministry and the Ministry of Commerce and the garment manufacturers association of Cambodia. Primark has saved approximately 30 million kWh of energy through its bespoke software system called ERICC (Energy Reduction Information and Control Console). As these results show, the company is doing well. This is crucial to achieve the standards we require for workers in our supply chain. We probably do not realise the full potential of the recycling programme yet, as we have not been advertising it, says Stewart. It relies on some kind of exploitation, of people or resources. In 2018 Primark executives George Weston and John Bason were paid 3.8m and 2.7m respectively. Credit: Pixabay, Video: An introduction to Love Your Clothes. We are all quite focused on the flagship stores, where you see people coming out of Primark with piles of bags. As Primark has also expanded into new regions over the last few years, the retailer has ensured that all its new locations are supported by safety specialists who help uphold its safety standards. Primarks expansive product range includes womenswear, lingerie, childrenswear, menswear, footwear, accessories, beauty, hosiery and homeware. People. We would suggest Primark increase its use of sustainable fibres, including developing further sustainable cotton programmes and using recycled fibres, along with tencel and modal instead of the less sustainable viscose fibre, says FitzGerald. Credit: Primark, Video: Primark HERproject. When asked on Primarks current opinion on adopting a circular business model, Stewart acknowledges that it is an area the value retailer is exploring, but is not ready to take on as a future goal. Until there is a general understanding that we all need to slow down and redress this industry, all initiatives, however welcome, however innovative, are just covering the problem, not solving it. Because if you give someone an education, it stays with them and thats sustainable. She stressed that the cotton project focuses on giving farmers a hand up, not a hand down in the form of free seeds, or pesticides or equipment. Primark also received our worst rating for likely use of tax avoidance strategies. When watching the video via a desktop computer, or laptop, please use your mouse to virtually 'look' around the space. 76% company name: primark module: strategic management bachelor business studies lecturer: dr. sharon feeney names of all group members: caoln kennedy: . The Penneys brand is not used outside of Ireland because it is owned elsewhere by American retailer J. C. Penney. In addition, the fashion retailer received the worst score on the Ethical Consumer 5 rating, an independent public consumer rating, for its cotton supply chain. In order to ensure garment workers can have easy access to their bank accounts, Geosansar bank kiosks are located close to factories and worker communities. From the way we source our products to how we organise our stores, our business is based on doing some simple things very differently from other retailers, which is how we can keep prices low, says Stewart. But if it isnt available, then consumers should also be proactively asking why not, and what retailers are doing on certain subjects. It divides the supply chain process into three distinct phases. The Central Supply Chain Team is accountable for critical activities like planning, data & analytics, operational excellence, supply chain business systems development and . But this also means consumers are more tempted to buy something without trying it and will be less inclined to return an ill-fitting garment, as it could cost them more in travel costs going back to the store than the actual garment itself. The most recent report released in July 2016, ranks Primark in Evolution Mode, with Greenpeace stating that although the brand performs well on the elimination of perfluorinated chemicals (PFCs) and transparency, it fails to take individual responsibility for the main tools it needs to meet its Detox 2020 plan. The report notes that Primark chooses to rely on the ZDHCs flawed methodology, which means the retailer is not selecting new target chemicals for eradication, or ensuring when it does test for their elimination, it is as close to possible to zero. Greenpeace encourages Primark to adopt a clean factory approach, which sees chemical elimination targets applied to suppliers entire factory floor and not just to Primarks own production lines. Additionally, other fast fashion brands are researching circularity, where used garments can be returned to the brand, the garment broken down (either mechanically or chemically) and respun into new yarn, then made into a new garment, adds FitzGerald. Almost all companies have a Code of Conduct, it is just a formality, counters Tara Scally, Campaign Coordinator for the Dutch branch of the Clean Clothes Campaign 7 (CCC). Cotton is a natural fiber that is grown in warm climates. Credit: Primark. According to the ranking, the large majority of the low performing companies , which includes ABF, are falling overwhelmingly behind, with all the dangers for human rights abuse of workers and communities that this implies., But these rankings have not discouraged Primark from looking for new ways to improve the wellbeing of its garment workers in developing markets. I just think its incredibly insightful because it follows the lifecycle of a product, from the cutting room all the way through the factory floor. Primark has shared the video on their website, under their Ethics section as consumers often requested what a supplier factory from the value retailer looks like. The value retailer said it was both quite shocked and moved by the results of FNV online survey and noted that it has been working for several months to launch its workers council. But what about Primarks Greenhouse Gas Emissions? Video: The garment industry in Bangladesh: Made in Bangladesh | Primark 2014. Credit: Primark. Regarding Primark's China sourcing strategy, on the one hand, Primark sources from as many as 475 suppliers located in China, far more than any other Asian country. For example, one initiative started by Primark together with Health Enables Returns 3 (HERHealth) and Business for Social Responsibility (BSR) in China, India, Bangladesh and Myanmar aims to educate female garment workers on their health needs and support them in learning. However, since then there have been no further updates or concrete outcomes on record of what exactly has been done to date. Credit: Primark. They discussed a number of HR-specific trends, including . But we know an ethical supply chain can't be a solo project. The move builds on Primarks previous efforts to promote social and environmental sustainability in its supply chain. This paper includes a study of the strengths and weaknesses of Zara Company supply chain management system. Primark Stores Limited (/ p r a m r k /; trading as Penneys in the Republic of Ireland) is an Irish multinational fast fashion retailer with headquarters in Dublin, Ireland. The 20-minute video features numerous items from Primarks Spring/Summer 2017 collection including boyfriend style jeans, striped cropped tops and lacy triangle bras - all in several colours and sizes. In August 2017, Bangladesh launched an initiative of its own to map all of its apparel factories. In the supply chain strategy you are going to plan out how you are going to work with distributors, customers and suppliers. We try to be proactive and helpful partners when it comes to audits, points out Stewart. Sustainable Brands If you think about the cotton project for example, we only started communicating that last year, when we have been working on it for three years. Combined, these tactics are said to ensure Primark remains accessible and affordable to all shoppers, while offer good value for money - a goal the company has always kept in sight, according to Primarks Director of Ethical Trade & Environmental Sustainability. 1: Inventory and capacity buffers Buffer capacity is the most straightforward way to enhance resilience, whether in the form of underutilized production facilities or inventory in excess of safety stock requirements. However, despite of all its initiatives aimed at modern slavery issues, Primark is still regularly accused of sourcing from sweatshops and forced labour camps. Unfortunately, Primark does not enclose their supplier list which makes it really hard to verify if what they communicate about their supply chain is actually true, continues Scally. We are building things to last. She claims she has had a suedette jacket she is wearing from Primark for years, and that her co-workers have even begun to joke about how often she wears it. We will continue to look at what we feel might be useful or interesting as we continue to develop our program.. Photo: Leipzig - Germany. Circular economy - we will talk about that when we have something we have done about it., How Primark is improving its workers well-being and educational initiatives. Primark previously signed the Responsible Sourcing Networks Cotton Pledge 6, and in doing so committed to not knowingly source any cotton from Uzbekistan 7 - one of the worlds largest exporters of cotton - for the manufacturing of its products. Published Feb 16, 2018 4am EST / 1am PST / 9am GMT / 10am CET. Our Primark Cares strategy is enabled by and underpinned by five key principles: Our commitment to ethics and human rights through our Code of Conduct and Supply Chain Human Rights Policy. The programme helps raise awareness on a wide range of topics, such as the importance of children's education, financial planning, general health and workers rights through the formation of worker education groups. I think it is a bit hard to talk about things you might do in the future because the challenge is keeping up with the ever-changing world. The strategic plan of Primark consisted of the strategy of growing inorganically as well as organically. What is Primark doing to offer affordable fashion at an amazing price? Many workers take pride in the work they do and the clothing they make and do not deserve to be exploited as they are now. Its suppliers factories. Over the years Primark has implemented a series of strategies and initiatives which vary from improving the livelihoods of its garment workers, to reducing its carbon footprint as well its chemical usage, water usage and waste output, to using more sustainable materials. The Global Sourcing Map allows consumers to access information about the 1071 factories and suppliers that make up the company's supply chain. Use of chemical fertilisers were reduced by 40 percent. . Since the global emergence of fast-fashion retailers like Primark back in 2000, the number of garments produced annually has doubled, exceeding 100 billion garments in 2014 - which is equal to nearly 14 items of clothing for every person on earth according to data from McKinsey & Company 3. New Coalition Hailing Blockchain as Linchpin of Successful Climate Action, Global Citizen, Authentic Team Up to Rally Consumers to Help #EndExtremePovertyNOW, Rise in Balance Sheet Activism Swells CNotes Community Investment Platform to $300M, Addressing Fashions Footprint at Farm Level Through Verified Sustainability Data, Most Businesses Dont Understand Scope 3 Emissions Heres Why. NGOs and trade organisations agree that this, as well as working with trade unions, is key for any fashion retailer in tackling cases of forced labour in developing countries. On their website, under Our Ethics, 8 Primark claims that all factories are inspected and audited. Primark maintains it is able to keep its prices so low because all of its orders are placed in bulk and not because its does not pay its workers enough. Finally, the issues of supply chain resilience and sustainability are discussed. What steps Primark has taken to become more responsible following Rana Plaza. Primark is a major retail group. For me, its really all about education. Crafting and Executing Strategy . The programme covers key issues workers should be aware of, such as health and safety responsibilities, hazard identification, and manual handling. It used to be about slashing prices simply to shift stock and push sales, but this model has shifted. The thing about Primark is that we communicate the things that we have done - rather than the things we want to do, explains Stewart. After reaching out to the shoppers who found these letters and labels and conducting its own research, Primark claimed the distress calls were all part of an elaborate hoax looking to sully its name. The social, sustainable and ethical impacts of the industry - both good and bad - continue to grow as the number of garments produced does. Recognizing that climate change cannot be tackled alone, H&M recently announced it will make its sustainable supply chain available to third parties, including rival fashion companies. Hence whenever we see that there are more member companies sourcing from the same factories, we encourage them to exchange information on audits, remediate together and cooperate on further improvement plans., What Primark is doing to produce clothing with the least amount of harm to the environment, Our aim is for all our stores to be as sustainable as possible with the technology and infrastructure thats available at the time. Strong union representation can bring labour violations to light. Design clothes with strengthened durability and to be recycled. . And thanks to Primarks low prices shoppers can easily fill a recycled paper bag full of garments for 50 pounds or less. Publishing more information on its website, training its members of staff and creating behind the scenes videos of the factories it works with, are just a handful of avenues Primark has taken on share what it does in terms of sustainability and social responsibility. That is why we have begun to explore how we can better measure what we do so that we might provide more credible and tangible evidence of our impact.. Objectivity has partnered with Primark since 1991. Unlike other clothes shops, people often come to Primark because they know theyll be able to afford a whole outfit. A key part of the programme focuses on sharing lessons Primark and DFID learnt following the Rana Plaza incident, including the retailers initiatives with local partners to provide both long-term and short-term aid. Following the expansion of its Sustainable Cotton Programme, which sees Primark working with CottonConnect and the Self-Employed Womens Association (SEWA) to support over 11,000 female cotton farmers in India, as well as increasing consumer interest in Primarks own sustainable and ethical practices, Primark has decided to become more vocal concerning its commitments to producing responsible fashion. Considering that the majority of Primarks products are made from cotton, we would suggest the brand dramatically increase its initiatives in this area by supporting similar programmes to achieve 100 percent sustainably grown cotton. In fact, the results of the cotton pilot programme were so successful they exceeded all Primark's expectations, which is why the value retailer has expanded the programme to support an additional 10,000 farmers in Gujarat over the next six years. In addition, 81 percent of respondents said they felt that Primark was missing a workers council who could negotiate agreements on their behalf concerning use of store cameras in relation to their privacy - even though the council is required by law in the Netherlands for any company with more than 50 employees. Primark should focus on building a solid, long-term relationship with their suppliers based on trust; ensuring labour unions are allowed within the factories they source from and are protected enough so they can do their work freely without threats, or harassment, notes Scally. This is Primark's first 360 degree video. Primark, a member of the Sustainable Apparel Coalition, has developed a new online tool that is helping usher in a new era of transparency for the retailer. Implemented by Dhakas BRAC Universitys Center for Entrepreneurship Development in collaboration with BRAC USA, the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and C&A Foundation, the Digital RMG Factory Mapping in Bangladesh (DRFM-B) project is the first of its kind to attempt to digitally map the entire garment industry in Bangladesh and marks a critical industry shift toward more transparency. We want to be able talk about the things we have done and show what results we have achieved. I think that this is something we made a decision on very early on and it gives us the confidence that the audit paints a clear picture of what is going on in that factory at that point in time.. The reported results show that working with farmers at this level can have a number of positive impacts on yields, chemical and water use reduction and increased income, says Jacinta FitzGerald, Head of Research at Project JUST 2. In the US, Primark has partnered with the charity Delivering Good, in which stores donate unsold items to those in need. The value fashion retailers parent company, Associated British Foods, acknowledges it faces pressure to set itself fixed goals in terms of responsible and sustainable production, but stresses transparency is key to making a real difference. As well as organically other clothes shops, people often come to Primark because know... Love your clothes done and show what results we have done and show results. 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