Levi Strauss puts stress on buying habit changes

Levi Strauss is reporting early signs of success for a new approach to ethical supply chain monitoring that entails adjusting buying habits.

The multinational clothing brand has introduced a programme to influence the behaviour of its San Francisco-based production staff, whose changes to orders and role in deadline slippages often force supplier factories into using overtime and sub-contracting to meet deadlines.

The six-month-old programme, applying so far only to the company’s US operation, was devised after a survey of 65 suppliers in ten countries showed a principal reason for overtime and sub-contracting was unrealistic order times and late interventions from San Francisco.

‘Factories were telling us that we were the cause of the problems,’ said Leslie Croshaw, Levi’s social and environmental sustainability manager. ‘We found that designers were big perpetrators of not sticking to deadlines by going directly to the factory, over the heads of others, to make a last-minute change.’

The company therefore created a system under which field staff who deal directly with suppliers were encouraged to report any ‘unacceptable behaviours’ by production employees, while the production teams were educated about the problems they were causing, and bonuses were tied to conforming with the new norms.

Croshaw said there had been some resistance among staff, especially designers who value their ‘creative freedom’. It was also difficult at first to get honest feedback from field staff, who were reluctant to ‘tell tales’ on their San Francisco colleagues.

‘Some people still ask why we are doing this, but that’s just a matter of education,’ she said. ‘It’s also important to highlight the small wins, the little things that are improved, because that motivates people to keep giving the feedback and make the changes. In general, the programme has changed people’s understanding of the impact they are having on suppliers.’

Croshaw said the programme was still ‘a work in progress’, but was already saving money through improved efficiency. ‘Just as one example, missed deadlines caused by order changes often mean that a factory has to send the finished product by air freight – rather than the cheaper option of shipping,’ she said.

Croshaw added that pressure on suppliers has been reduced, thereby cutting the likelihood of problems with workplace standards, which was the main initial reason for the programme.

The consensus on ethical supply chain management has recently shifted away from the benefit of auditing suppliers towards the behaviour of buyers, which many believe is the root cause of many code of conduct infringements. Both the Ethical Trading Initiative and the US-based Business for Social Responsibility have said companies should change their practices in this area.

Croshaw said feedback from factories had been ‘good’ so far. Levi says one key to success has been high-level executive commitment to the programme, which, though overseen by Croshaw’s sustainability unit, has the explicit support of the senior vice-president of supply chain.