Remote working. Zoom pub quizzes. Memes. Home workouts. Just a few terms that have come synonymous with lockdown in the United Kingdom. For those that have the luxury of working from home in the western world, quarantine need not be so threatening or sinister. However, at the bottom of the supply chain, there is a different story.
Broken Supply Chain
A lower level of demand globally means reducing or ceasing production entirely. At the greater levels of seniority within a company, this decision makes economic sense. As demand is lower, sales are lower, and ceasing production is a way to cut losses. However, for those working at the production level, this can be detrimental for thousands of families relying on an income. Since the outbreak of coronavirus, factories have been forced to shut down. In addition to this, many brands have little to no consideration for the cash flow needed to pay workers. This has meant issuing cancellations after goods have been partially or fully made. Many brands have asked for discounts or extensions for outstanding payments, failing to recognise the harmful ramifications at the bottom of the supply chain.
Double-Edged Sword
Factories are a hotbed of disease. Being shoulder to shoulder with other workers during the time of an international pandemic is a recipe for disaster in terms of contagion. Garment factories are known for their poor working conditions at the best of times; let alone when there is a highly contagious disease. However, for many workers, working in these conditions is preferable to not receiving a household income.
Not Just China
Although China is known as the factory capital of the world, for garments other Asian countries are often favoured. Bangladesh, Cambodia, Vietnam, Indonesia and Myanmar are known as being cheaper alternatives to China for this part of the supply chain. In the developing world, garment manufacturing is one of the crucial industries. According to statistics, Bangladesh accounts for 6.7% of garment production. They employ a surplus of 4 million garment workers and garments accounted for over 90% of the country’s exports in 2019.
Long Term Damage
Due to the uncertainty surrounding the pandemic, no one knows if and when normality in this industry will be restored. This means that there is a lot of insecurity surrounding garment-worker roles. Further issues such as price increases of raw materials, labour shortages and lack of production capacity are predicted.
Some brands are starting to recognise this chain reaction and have committed to paying existing orders in full to ensure cash flow for the clothing manufacturers. These brands include H&M and Zara. The whole world currently has a cash flow problem and few industries are immune from the effects of coronavirus. Hopefully the actions of H&M and Zara will pave the way for those in a greater position of power to recognise the effects at the bottom of the supply chain.
