REVEALING AND RE-DISTRIBUTING THE TRUE COSTS OF PRODUCTION IN THE GLOBAL APPAREL INDUSTRY
The FairCapacity Program aims to develop a better method for calculating and forecasting production capacity and to improve buyer-supplier communication in the global apparel industry.
Social Accountability International leads the FairCapacity Program and is collaborating with GSCS to implement the program in Bangladesh, including delivering training and capacity building, conducting labor performance assessments, and engaging stakeholders.
In today’s garment manufacturing industry, factories are often strained beyond their limits by orders they cannot fill and deadlines they cannot meet. Poor production capacity calculations are one contributing factor. In most facilities, managers measure their production capacity using only a small number of the relevant metrics and relying on assumptions rather than data. Common production disruptions like worker absenteeism, supply delays, and production bottlenecks are often left out of the equation, resulting in inaccurate capacity measurements and unrealistic production targets.
To these already unattainable targets, brands and retailers add price, time, and volume pressures without realizing that factories are already overstretched. Operating in a highly competitive industry and faced with consumer demands for companies to introduce new designs frequently, completing orders on time is the highest priority. Factory managers often have to sacrifice other important considerations—including labor compliance, quality, and investment in future improvements—to make ends meet.
This means that the costs of doing business are ultimately borne by workers. Although factories may pass labour and social inspections based on ideal conditions, in reality they often operate under pressures that lead to violations of those standards. Common measures include scheduling excessive overtime, bringing on additional workers that factories cannot safely accommodate, and sub-contracting to unauthorized and under-regulated facilities.
SAI, in partnership with GSCS, seeks to address these problems in Bangladesh through a comprehensive program to quantify the impacts of purchasing practices on supplier production capacity, improve production capacity calculations, and improve labour performance.
The Program focuses on:
● Understanding Production Capacity Variables – We have collaborated with factory managers, academics, and industry experts to gain a holistic understanding of the factors affecting production capacity in garment manufacturing facilities.
● Developing a Capacity Calculator – We created an algorithm (the FairCapacity Calculator) for calculating and predicting capacity based on those metrics.
● Training & Capacity Building – We have developed and are now delivering tools and training to help factory managers collect the necessary data, use the FairCapacity Calculator as an ongoing practice, and improve production capacity based on insights from this process.
● Developing an Online Platform – In collaboration with our technology partner, we developed an online platform—the FairCapacity Platform—that incorporates the FairCapacity Calculator and will allow buyers to connect directly with suppliers advertising more reliable production capacity.
● Connecting Buyers and Suppliers in New Ways – In all aspects of the project we work to encourage buyers and suppliers to cooperate on sourcing and production processes that enable social compliance and benefit both workers and business.
SAI began the FairCapacity Program in Bangladesh in 2019 with the support of the European Commission and extended the program to India in 2020 with the support of the Global Fund to End Modern Slavery, UK Aid, and Norad. For more information, please contact firstname.lastname@example.org