Purchasing practices

ETI Experimental Projects

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Project in brief

(For a full project overview, please download ETI Project Overview: Purchasing Practices (July 2007) under Project documents below.)

It is now widely acknowledged by ETI members that purchasing practices – e.g. lead times, prices and changes to orders - have a significant role to play in ensuring labour standards in supply chains.

In 2005, several ETI corporate, trade union and NGO members started a project to look more closely at the impact of purchasing practices on conditions for workers, with the ultimate aim of finding out how purchasing practices can better support labour standards.

Individual companies in the group are now working with trade unions and NGOs to review their purchasing process, and have started to identify how this puts pressure on their suppliers and workers, and in some cases creates hidden costs.

Currently, project group participants are involved in the following activities:

• Analyzing the critical path (the pipeline of decisions and actions from design to delivery);
• engaging suppliers to investigate the impact of key purchasing decisions;
• raising buyers’ awareness of working conditions; and
• collaborating with other companies to explore the impact of multiple buyers sourcing from one supplier and the role of agents.

At this stage, the project group has learnt some important points about how to work on purchasing practices in each company. The following points are seen as an important foundation for a company to address purchasing practices effectively:

• Senior managers across the company need to be firmly committed to start looking at how purchasing practices can support improvements in working conditions.
• There needs to be a collective approach to addressing this issue – working with staff across the business, suppliers, NGOs and trade unions – to fully understand the way purchasing impacts on working conditions.
• Addressing purchasing practices requires a dual focus on ethics and product because solutions must be economically viable – and this requires collaboration between those who procure and those who manage labour standards from an early stage in the project.
• Project group members are building a better understanding of the whole supply chain – which is essential to finding out where there might be opportunities to mitigate purchasing practices at any point in this chain.

 

Which ETI members are involved?

Companies:
Asda, Debenhams, Gap, Inditex, Marks and Spencer, New Look, Next, WHSmith.

Trade unions:
International Textile, Garment and Leather Workers Federation; Prospect; Transport and General Workers Union.

NGOs:
CAFOD, Homeworkers Worldwide, OXFAM, Traidcraft, Women Working Worldwide.

 

Further information:

Please download the Full Project Overview (see Project documents below) to find out more about the background to this project and for an update of what each corporate member of the group is working on.

For all other project enquires, please contact Miriam Neale: miriam@eti.org.uk

 

 

 

Project documents:

1. Case studies to address impacts of purchasing practices on working conditions (Report from ETI members’ meeting, 29 November 2007)
2. ETI Project Overview: Purchasing Practices (July 2007)
3. Buyer Training: methods and materials used by members of the ETI Purchasing Practices group (May 2007)
4. Summary findings from first phase of research by Gap and Women Working Worldwide [PDF, 56kb]

Relevant links:

• ETI Conference 2005: Critical Issues Workshops: C6: Moving production in search of the cheapest deals… is best practice possible?
• ETI Members' Roundtable: Purchasing Practices: ‘marrying the commercial with the ethical’
• ETI Conference 2003 Report: Chapter 9 - Purchasing practices: what impact on labour conditions?