In this extract from Ragtrader's FREE Fashion Supply Chain Report 2024, APG & Co sustainability manager Neha Nagpal reveals how the parent company of Jag, Sportscraft and Saba is tackling supply chain traceability and transparency.
Where are your key suppliers located and what’s new for them?
We have long-standing relationships with our suppliers in China and Vietnam and we also have offices in both countries with highly skilled and talented production and compliance teams. As we have been working with these trusted partners over so many years, we are able to offer consistent high quality, fitting and finishes to our customers.
Both China and Vietnam are adopting the latest technologies in garment production and fabric innovation. Many suppliers are transitioning to clean energy and low-waste production methodologies. Businesses must be sustainable in order to provide good employment opportunities for people, and we are able to do that as we are managing our supply chain while we improve our sustainability performance.
How is APG & Co ensuring traceability across its supply chain?
APG & Co has invested in Retraced to enhance traceability efforts across its supply chain. Currently in the second year of implementation, we have completed onboarding and induction training for all our tier 1 and known tier 2 suppliers. In terms of visibility, APG & Co has traced 100 per cent of tier 1 and over 95 per cent of tier 2 suppliers and is in the early stages of tracing tier 3.
Our efforts in supply chain visibility have been in the works for years, and now we are combining this with tracing our materials. For us, traceability has been a game of patience. It requires time to train suppliers at each level and to have verifiable documentation available at all levels. We are in the middle of our cotton pilot and seeing some good results.
Our plan is to expand Retraced to cover all garments and materials over the next two years. The following are some tools that have worked well for us:
- Supplier relationships
– APG & Co is proud to have strong longstanding suppliers who have been key in our traceability and governance efforts. Our suppliers have been open to change and embraced transparency. It is crucial to maintain honest supplier relationships as each level of supplier connects the business to the next level. - Connected strategies
– Our brands and teams have and continue to work towards building strategies and initiatives that are connected to the bigger business goals. We have responsible materials transition, sourcing and supplier management strategies that are interconnected to deliver synergy in our traceability efforts. - Investment in tracing solutions
– Understand and compare the solutions available in the market and select the one that works for your business needs. For us, Retraced was the clear winner. It can be scaled to meet our business needs and delivers on the criteria most important to us including less administration burden for our suppliers and ongoing training in multiple languages. - Sustainability, Compliance & Production
– Our sustainability, compliance and production teams have received training to manage the platform and work closely to ensure this information is passed to our suppliers. A coherent consistent approach is reflected to our suppliers, and they understand that traceability is very important to our business. Additionally, our suppliers can reach out to our teams and account manager anytime with questions.
What are the challenges in achieving full visibility into second- and third-tier suppliers?
There are some common challenges across different tiers including:
- Human resources and roles
– As administration pressures increase for suppliers to provide data and support brands’ efforts in traceability and sustainability, suppliers are having to rethink the allocation of human resources and the need to create new role(s) and responsibilities within the business. And not all suppliers are there yet. It will take time for businesses beyond tier 1 to implement these changes to keep up with the changing demands. - Infrastructure
– Many countries that are popular production hubs do not have the infrastructure required to deliver traceability. This includes internet, hardware capability, and knowledge building, among other things. - Time and cost
– Traceability is a time and cost-intensive endeavour. Brands are looking at three to five-year timelines to implement such projects. It's not about changing one process, it’s about implementing an entirely new system and ensuring it is embedded across the supply chain.
As discussed above, APG & Co has selected a solution that fits well with our business needs and is suitable for the majority of our suppliers. We have ensured all our suppliers receive training on how to manage the platform and ongoing support. In the first phase of implementation (for our pilot), we have selected key programs and suppliers who are well-placed to support the pilot. Learnings from our pilot will help when we expand the solution to trace all orders. This is planned over the next two years which gives our suppliers enough time to prepare.
How is APG & Co reducing the carbon footprint of its supply chain?
Last year APG & Co conducted its inaugural GHG assessment in partnership with Pangolin Associates. We are currently working on developing roadmaps and targets using the findings. Our focus is on managing our scope 2 energy-related emissions and working with our partners and suppliers to reduce our scope 3 emissions. This work is happening in conjunction with our preparations for our second GHG assessment.
We will have some measurable targets in place by the end of FY2025. However, targets will evolve as we capture more data across our supply chain.
We have established initiatives in place that feed into our roadmap, like:
- Lean and low-impact packaging transition completion by end of FY2025
- Responsible material transition completion by 2030
- Zero unsold products send to landfill
- Over 90 per cent freight via shipping
Our roadmaps and targets will be finalised in consultation with our executive leadership, Audit Committee and Board, and our year-on-year performance will be assessed by all three groups. Additionally, we plan to publish our targets on our corporate website, so our customers and other stakeholders can follow our journey.
How do you predict global supply chains to perform in 2025?
The emphasis on data, material traceability and transparency in reporting will continue to gain momentum and significance since Australia has introduced climate-related reporting. Simultaneously, with the announcement of the appointment of Australia’s first anti-slavery commissioner, we are likely to see some changes in reporting and implementation including more businesses expected to report and tighten governance and supplier visibility efforts.
APG & Co is currently preparing its fifth modern slavery statement and is confident of the measures in place to manage human rights due diligence. Ongoing work on improving resilience in supply chains will continue as climate change impacts get more pronounced. This is likely to drive the adoption of better technologies and innovation in manufacturing.
With the growing demand for online shopping in Australia, more brands will push for increases in green logistics solutions to manage carbon emissions given the large distances in Australia.
As Seamless gains more support from brands and the Government, we are likely to see more collaboration in the industry and hopefully, the launch of some pilots.
Download your FREE copy of Ragtrader's Fashion Supply Chain Report HERE.