Case study: Monitoring suppliers in the clothing industry 

Prompted by concerns about working conditions in the garment industry, a major fashion group wanted to investigate to what extent its suppliers in India were complying with its Code of Conduct and assess its exposure to risk through its suppliers.
Monitoring the supply chain

How KPMG helped

Sustainability professionals at KPMG in India mapped the group’s supply chain and identified more than 3000 subcontractors involved in production in India alone. They also conducted analysis to identify priorities to reduce risk, complexity and turnover in the supply chain. They developed new performance indicators and a supplier rating system (including social and environmental criteria) to encourage main suppliers to take responsibility. In addition, they conducted regular audits and site visits to main suppliers and their subcontractors to verify compliance with the Code of Conduct.

Benefits to the client

As a result of the project, suppliers changed behavior to limit outsourcing and to build long-term relationships with their subcontractors. The social and environmental performance of the supply chain has moved from mere compliance with the Code of Conduct to proactive management of issues such as gender diversity and education. Slowly, the sustainability parameters found their way into the group’s business considerations. The group is now replicating the model in other manufacturing locations.

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