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How Levi's includes worker well-being in supply chain management

In the second post of her two-part series, Andrea Moffat describes her recent experience in Cambodia working with suppliers, local NGOs and major apparel manufacturers on the implementation of a new program to improve the lives of workers.
by Andrea MoffatGreenBiz.com Posted on Mar 29, 2013

This post is the second in a two-part series by Andrea Moffat, vice president of corporate programs at Ceres, describing her recent experience in Cambodia working with suppliers, local NGOs and major apparel manufacturers on the implementation of a new program to improve the lives of workers who make goods for the international market. Read part one here.

In Bangladesh, workers are demanding safe and healthy workplaces. In China, where some of the most highly publicized abuses of worker rights have occurred, there are labor shortages despite China's massive population. And in Phnom Penh, Cambodian workers are striking for higher wages to help them build a better life for themselves and their families.

Levi Strauss & Co. sees this changing labor landscape as an opportunity, which is why they have convened the meetings I am attending here in Phnom Penh. Working with my organization, Ceres, the company is pioneering a new approach to supply chain management, one designed to promote worker well-being in five core areas: economic empowerment, good health and family well-being, equality and acceptance, educational and professional development, and access to a safe and healthy environment.

Also attending these meetings are representatives from some of LS&Co.'s supplier factories, local NGOs and other brands who are discussing plans for testing this bold initiative in five pilot factories in Cambodia, Bangladesh, Egypt, Haiti and Pakistan.

Listening to the "worker voice" is essential to this approach. In each of the pilot factories, workers were asked about their needs, their working conditions, and for input on how their workplaces and their lives could be improved. The quantitative survey and qualitative studies were conducted by an independent third party and finalized through a consultative process that involved a variety of stakeholders. Though priority needs vary across the factories, the surveys revealed many common concerns: fair wages, access to health care, harassment in the workplace, access to clean water and financial literacy.

As we progress through two days of discussion and brainstorming, it is obvious these suppliers see their workers as their competitive edge in business. As one put it, "we want to be the employer of choice and the supplier of choice." These businesses recognize that worker satisfaction is essential to achieving those goals. But how widely is this sentiment shared among suppliers both within and outside of the apparel sector? And is it translating into action?

At some, it is. One Bangladesh-based supplier represented at the meeting seems to be seriously examining how worker satisfaction drives business success. They have launched several initiatives providing services such as food to expectant mothers, free medical care, free transportation to and from work, and awards for attendance and production, all of which are designed to improve the lives of their employees. To determine if these programs are having a positive impact, the supplier evaluates progress with specific key performance indicators, such as turnover, absenteeism and avoidance of worker strikes, comparing these with benchmarks for similar companies. I found the results compelling.

This all sounds very encouraging, but sitting here in Cambodia -- a center of apparel manufacturing -- I wonder: How do we bring these efforts to scale? How do we convince thousands of suppliers to support the well-being of the 335,000 garment workers in Cambodia? Or the 3.6 million garment workers in Bangladesh?

The supplier has shown that investing in worker programs can have distinct business benefits, and that may persuade others to take similar steps. But, to be successful over the long term, these efforts must be "owned" by the supplier, the workers and the local communities; they can't be imposed from up high. Collaboration will be essential, and best practices and lessons learned will have to be shared.

Importantly, companies in the apparel sector and beyond must communicate to their vendors that to be "a supplier of choice" truly means being an "employer of choice," and reward suppliers with a proven commitment to worker well-being with more business and longer-term contracts.

Consumers, too, have a role to play. They can exert their power -- through the purchase of their electronics, sneakers or jeans -- by choosing companies that take a stand for worker rights, and avoiding those that do not.

No single company -- even when partnered with a handful of committed suppliers and dedicated NGOs -- can meet this challenge alone. The business of worker well-being has to be everyone's business. From here in Phnom Penh, the road ahead looks long, but the journey has begun.

Read the post at GreenBiz.com

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Meet the Expert

Andrea Moffat

Andrea Moffat is the Vice President of the Corporate Program and leads Ceres work with business on sustainability issues such as climate, energy, water, and supply chains. With more than 18 years of experience, Andrea leads the corporate advisory team, engaging with more than 80 companies to help them meet sustainability commitments and achieve greater performance results.

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