David Horlock, VP Global Inspection and Auditing (Consumer Goods), Intertek interview with Textile Today.
BTT: We understand Intertek has introduced a new auditing approach/platform.
Mr. David Horlock: We have done a lot of work through the last twelve months, talked to many of the parties and came up with a platform solution to manage auditing activities. This new approach was created to reduce compliance manager and manufacturer frustration with lack of benchmarking information.
Mr. David Horlock: Most often audit monitoring organizations like ourselves are being requested to visit the factories by the buyers to qualify factories and manage their reputational risk associated with CSR. In doing this the focus is often targeted on finding non-conformities.
With over 100 Industry Codes, lack of mutual recognition between programs, the absence of equivalent tools has resulted in excessive duplication of audits with some factories being audited more than 25 times per year. This is a huge cost for the industry.
The other challenge is that the standards are not always achievable and finding the right balance between what the economics of the market will allow and what is realistically achievable within a specific time frame can be challenging at times. Working hours is a good example of this challenge with many uncontrollable factors such as just in time delivery, fluctuating raw material cost, currency fluctuations, shrinking margins and seasonal peaks all add to the complexity which varies greatly between sectors.
Another concern is the lack of Industry benchmarking and community-based programs due the use of paper-based checklist. This means the industry is unable to benchmark and demonstrate all the positive progress made over the last 10 years in working conditions, amenities, OHS, factory environment, living conditions, pay and other social aspects. Real progress has been made in Bangladesh but no one seems to be telling the good story which means someone else will tell your story. The story told is usually based on the problems and faults because this is what we capture and measure. We fail to report on the real positives progress made.
As a result of this most compliance managers don’t know that they don’t know. For example ask any compliance manager to tell you what are the key risk and strengths compared to the market average, how does his supply chain performance compares with other industry and country benchmarks, where are the major risk ? Most simply do not know. This is what is lacking in the current paper-based checklist process.
Today more than ever, product safety, CSR and environmental issues are on the rise. Day by day we are seeing more sophisticated consumers, shareholder, investors, NGO’s and managers looking and wanting better answers at the expanded definition of quality which covers supply chain impact on the environment, social and security aspects.. To provide better answers and facilitate continous improvement we need to move towards a better data capturing, benchmarking and remediation model
BTT: Can you tell briefly about GSCC?
Mr. David Horlock: Global Supply Chain Compliance (GSCC) is a web-based operational platform at which we run and support our portfolio of assessment programs including Social, Environment, Security and Quality. The benchmarking available in GSCC shows your position more clearly. You can benchmark your results with industry, country and global average at a question, subsection and overall performance level.
We are proud to say, Intertek has the biggest factory performance database in the world working with many global brands and retailers. As our factory community exceeds 20,000 we offer the stakeholder community very useful and meaningful benchmarking information to help them see the world as it is. The major benefit of this is that it motivates people to improve and result in better decision making to resolve issues and mitigate risk.
From the GSCC system, you can see your improvements year by year. In the past when you were improving significantly year after year, you never knew or told it. This new system is originally for the first time eliminating the unknown.
BTT: Will the new system reduce the cost of auditing for the factories?
Mr. David Horlock: All Intertek programs are community-based programs where the factory owns the report, benchmarking data and is able to share this with a multitude of buyers. Our most mature program is GSV (Global Security Verification) which has resulted in many factories reducing their C-TPAT or Security audits by 40-60% due to the current and growing program recognition by multiple brands and retailers. We see exactly the same trend occurring with our new programs including “Workplace Condition Assessment” and Think Green Initiative”.
However, the biggest business benefit is putting you in a position whereby you are able to evaluate your performance against your industry peers. Moving from the unknown to the know means you make better and more informed decision. This is why we coined the phrase, measured results for improved performance.
BTT: Will this auditing system give factories status and guidelines for improving their status?
Mr. David Horlock: Factories are provided a detailed report with graphic and benchmarking offering :
- Performance analysis and benchmarks across region, industry, product category and vendors more effectively communicates performance issues, trends and progress
- Community recognition by brands and Retailers will reduce audit cost and fatigue over time
- Benchmarking and automated CAPA process drives improvement through competitive analysis
- Factories take full ownership, own the information and can showcase Performance Outcomes
- Better allocation of resources to areas requiring greatest attention against industry benchmarks
- Achieving good corporate governance and preferred supplier status
- Improving Trust and Confidence with suppliers through greater transparency of performance.
- Graphical reporting and the Achievement Award allows suppliers to showcase performance
BTT: How are you going to align your new tools while you are doing audits for other Industry Association programs and codes of practice?
Mr. David Horlock: There are over 1000 codes and implementing systems in this area and we will continue to provide audit services for all Industry Association programs which are an important part of our business. However, 70% of our clients have their own programs or use Intertek programs and are demanding better performance measurement, benchmarking and training to facilitate continuous improvement. We need to cater for this demand. At the same time, Factories are wanting to join a community-based program which they can call there own. In this way they can showcase their performance and take control of their own improvement journey as a result of benchmarking and measured results.
BTT: So what is your corporate position as you are only implementing or monitoring audits for those other Industry Association codes (as you mention) and again you are introducing a new one too?
Mr. David Horlock: We make no apology to the industry regarding the various programs available today, All these program have their existence based on the demand of the various stakeholder communities. This is the market working in a open and free environment.
As the worlds largest assessment company in the Consumer Products sector, we are listening to our clients needs and what we have done is to innovate and deliver to the market the next generation of auditing services to cover the key themes of
- Workplace Condition Assessment (WCA) – Social
- Think Green Initiative (TGI) – Environment
- Global Security Verification (GSV) – Security
- Mill Qualification Program (MQP) – Fabric Quality
- Supplier Qualification Program (SQP) – Quality
We have a web-based operation platform to manage the entire audit process and at the same time deliver meaningful data providing greater performance visibility which enables you to act on the key issues and even tell the world your story through measure results.