Verina Ingram was invited to participate in a panel discussion on supply chain governance.
I was invited to participate in a panel discussion on supply chain governance at the Fair Wear Foundation in Amsterdam by associate director Sophie Koers and co-author of the book Praktisch Idealisme. To prepare, I randomly asked around what my colleagues think the Fair Wear Foundation is about. Most thought that the name speaks for itself: a foundation promoting clothes which are produced fairly. And indeed, the Fair Wear Foundation wants to see a world where the garment industry supports workers in realising their rights to safe, dignified, properly paid employment. To do this, they focus on the most labour intensive parts of the processes through which raw materials, such as cotton, flax or petrochemicals, are transformed into materials, then garments, and onto to consumers to purchase, wear and dispose of. FWF calls this the supply chain.
But what is a supply chain? And is there a better expression?
A supply chain is often termed the network of all the individuals, organizations, resources, activities and technology involved in the creation and sale of a product, from the delivery of source materials from the supplier to the manufacturer, through to its eventual delivery to the end user. A supply chain is thus about the management and logistics of getting a product from A to B. A value chain at first glance seems similar: it’s also about the processes, inputs, outputs and stakeholders - both direct (such as farmers, manufactures, traders, retailers and service providers) and indirect (banks, government agencies, support organisations) - involved in bringing a product from the raw material, through processing and production, to delivery to final consumers and ultimately disposal. The key difference is that the word value denotes the value (or utility) added to goods and services to enhance customer and/or societal value in this series of operations.
Value however is not only the economic, monetary value added as the sequence of activities often creates a higher unit value for the clothes sold at the end of the chain, than the kilo of cotton at the beginning of the chain or meters of cloth somewhere in the middle. Value is also socially, culturally and environmentally defined. It is the regard that something is held to deserve; its importance, worth, or usefulness. It reflects principles or standards of behaviour, and a person's or society’s judgement of what is important in life. Value can be intrinsic – the value of something in and for itself, irrespective of its utility for someone else. Examples are the price that some people are willing to pay for a certain brand or label, irrespective of for example, how functional those shoes are for walking, or that hat is when talking. It is also the price and processes that include these externalities – the things not included in many market values: such as a decent wage, or the environmental costs of, for example producing cotton or tanning leather.
Many of the processes in garment value chains involve or embody unfairness, inequality and have undesirable impacts – economic, social and environmental. Using the term supply chain ignores this political dimension and instead, focuses on the logistics, information and activities. That as Martin Curley, a fellow at the School of Transitional Governance and a panellist in the discussion “supply chain is the term always used in this industry” is not surprising. The disparity in values inherent in the apparel chain, but also in commodity value chains which are notorious for inequalities and negative impacts - such as cocoa, coffee, oil palm, timber and tea - is not explicit when in the term supply chain. In contrast, the term value chain acknowledges, and emphasises the value that CAN be built into chains. If we – as scientists or as a lobby organisations such as the Fair Wear Foundation - want to influence and create change, using a language in which values are clearly expressed is a start to solving the unsolvable.