In his latest article, entitled “Shining a Light on Subcontractors”, WWD correspondent Evan Clark writes about the dangers of unauthorized subcontracting. He highlights how Gap’s problem in India last year brought media attention to an issue that has grown in importance and frequency as today’s global supply chains have grown in complexity.
Clark explains how some brands are responding by enforcing corporate compliance programs, spacing out their orders, or moving towards consolidation among other things. But even these measures are not enough to guarantee safety from unapproved subcontractors.
Here’s what our research team had to say on the subject:
Panjiva Inc., a New York-based firm that helps brands evaluate factories, trolls governmental data for suspicious spikes in production so that companies using its service can follow up. Of the roughly 38,500 suppliers in Panjiva’s database, almost 3 percent, or 1,107 factories, shipped 50 percent more in August, September or October than they had during any previous month. That is a 33 percent increase from a year earlier.
There are legitimate reasons for such a jump in production — new capacity, for instance — but dramatic increases might also be picking up unauthorized subcontracting.
“There are spikes [in production] on a regular basis,” said Josh Green, chief executive officer of Panjiva. “This is a trend that is clearly increasing in terms of frequency.”
Continue reading “Shining a Light on Subcontractors”.
Learn more about our analyses of subcontracting behavior in the apparel industry by contacting our research team at research@panjiva.com.
