Article 1

Slimline: Marching to a Different Drummer Globalisation means different things to different people. To the CEO of a multinational enterprise, globalisation reflects the changing business world - access to new customers, opportunities to reduce production costs by locating factories in low-cost areas and the threat of competition from foreign firms. To workers in developed countries, globalisation often implies job insecurities. To human rights activists, globalisation implies exploitation of workers and denial of human rights. Many multinational companies have been confronted with allegations of mistreatment of workers in developing countries. Nike, for example have been the target of accusation that its sub-contractors in China, Indonesia and other Asian countries abuse their workers. One company that has never been subjected to such criticism is Slimline Limited, an apparel manufacturer in Pannala, Sri Lanka. Indeed Slimlines way of doing business stands in contrast to that of many apparel manufacturers in developed and developing countries alike. The company employees 5000 workers who produce USD50 million worth of apparel annually. Many of the employees have Bachelors or Masters degrees. Its staff also includes PhD holders, physicists and even former investment bankers. Slimline goes out of its way to provide its workers with working conditions that exceed industry standards and entry-level wages are set higher than those in the local market Slimline was founded in 1993 as a joint venture between Mast Industries, Courtaulds Textiles PLC and MAS Holdings Ltd. The plant has a feng shui-influenced layout, tiled walkways, verdant trees and bright purple paint. Slimline even has its own wastewater recycling plant. The factory opened with a ribbon cutting ceremony, and flew the Sri Lankan, UK and US flags to celebrate its multinational partnership. 3/-

Slimline has benefitted from the unique knowledge and expertise of the joint venture partners. Mast Industries is a US based contract manufacturer of apparels with annual sales of USD1.5 billion. Among its major customers are Victorias Secret, Marks and Spencer, Liz Clairborne, Ralf Lauren and Tommy Hilfiger. Courtaulds Textiles was the UKs largest apparel manufacturer. The third partner, MAS Holdings Ltd is a privately owned Sri Lankan company that has rapidly become Sri Lankas largest apparel manufacturer and one of the largest employers in Sri Lanka. Slimline later developed the worlds first carbon-neutral textile factory. .Like most apparel manufacturers, most of its employees are female sewing machine operators. Even here Slimline defies the sweatshop stereotypes that plague the industry. Its production workers use advanced pneumatic sewing machines instead of manual models. Work stations are ergonomically designed and the factory is airconditioned. As a result, Slimline attracts a premier workforce. The job is very demanding but the pay is good. Computers monitor the output of each worker, who must match the factory-wide production standards in order to earn their monthly bonus. But contrary to industry norms, the standards are lowered down for pregnant workers. Why has Slimline adopted this approach? Slimlines managers have concluded that Slimline cannot compete with China or Bangladesh on the basis of low wages. Instead, they believe that they must focus on producing high quality goods for their customers who are brand name retailers such as Victorias Secret, Marks and Spencer and H & M. Notes one Slimline official, In todays global economy, Sri Lankan manufacturers must tie themselves to big Western retailers to survive and the more they do that the more their factory standards have to meet the workplace norms demanded by Western consumers. In the apparel industry, most outsourced manufacturers are nameless but their brand owner customers are becoming more and more selective about where they place their business. In the late 1980s and early 1990s, labour unions, environmentalists, human rights groups and government agencies first sounded the alarm about the use of sweatshop contractors by major brands. In 1996 the United Nations introduced the Global Compact for corporate practices based on human rights, labour, environmental and anti - corruption practices. 4/- Slimline believes it is unique and should publicly advertise their compliance and good labour practices, rather than be labeled as just another global sweatshop. Slimline believes it should capitalise on the growing interest in sustainable consumption, the trend of buying in a socially responsible way, like organically grown foods or non- sweatshop clothing. Chinese manufacturing plants have a good supply chain and good manufacturing facilities. But much of the work in Chinese apparel plants is subcontracted to other plants. So the customers have no idea exactly where and how, and by whom and under what conditions, the clothes are actually being manufactured. To make sure that the difference is clear to their customers, Slimline allows customers to visit the plants at any time, and have full and transparent access to information. The driving force behind Slimline is Dian Gomes. In 1993, Gomes was 36 years old and employed as the finance director of an apparel factory when he was approached by Mahesh Amalean, the chairman of MAS holdings to launch a new business Slimline. Gomes rose to the challenge and set himself goals that were very tough. He said: I had a dream, and I set out to make it a reality at Slimline. To make an ambitious garment project a state-of the art plant, a super efficient monolith. My aim was to be number one and stay number one. The first task confronting Gomes and his new management team was to build a stateof-the art garment factory. Coutaulds sent an experienced team of production managers from its British operations to oversee the construction and start-up of the factory. Gomes added Japanese inventory control and production methods that cut costs and raised productivity. He later incorporated a USD4 million computer system into the factorys operation to monitor quality and production. The system is integrated with the computer systems of its major customers, facilitating distribution and improving service to its customers. The system facilitates communication between the factory and its customers and the marketplace, allowing the factory to quickly shift production to the styles most in demand. Companies like H&M and Zara were shortening the traditional fashion cycle from nine months to six weeks. Slimline wanted to shorten their lead times as much as possible so that their customers could work as close to the season as possible. 5/-

With the new IT systems customers like Marks & Spencer can send their sales information by the end of the day at Colombo time, on a Friday. On Monday morning, the system can recommended what Marks & Spencer needs to reorder and Marks & Spencer can confirm the order when they start their day, which was 2PM in Colombo. By the end of the day, Slimline can check with the fabric mills and confirm with Marks & Spencer that they would ship the order in two weeks time. Marks & Spencer could log in to the manufacturing systems, see the production floor, see the status of their style in the factories, how much was cut, produced, packed, ready to ship, what was traveling by sea, by air and how much fabric they had. If a color or size was selling faster in the store, Marks & Spencer could change their order midstream. Although its state-of-the-art facilities and technology have played a critical role in Slimlines success, Gomes and his staff have worked hard to instill pride in the company. One way Slimline has bolstered its companys image and enhanced employee morale is by sponsoring company sports teams such as cricket and boxing. Nor has the company forgotten the community. Slimline has built an auditorium for the local high school and equipped its computer and science labs. It also provided scholarships allowing local high school graduated to attend local universities. Although Slimline is a relatively young company, it has been recognised by numerous groups for its innovative approaches and commitment to its workers and the community. The company has received many awards and recognition both from local as well as foreign countries. It has also received recognition from the International Labour Organisation for its human resource practices. With such success comes growth. The company now operates four factories that produce 50 million units of womens sleepwear and intimate apparel. But keeping its old customers will not be enough. Where would future growth come from? Slimline pushed ahead with developing their own branded intimates, known as Go Beyond for the Southeast Asian market and focused on entering the Indian retail market while hoping that they would not step on their customers toes as a result. The key to Slimlines future growth would be turning Go Beyond into a world-class stand-alone brand. On a bulletin board in his office, Slimlines Director of Marketing pinned up a little Go Beyond logo clothing label, like the tags with brand name and fabric care information sewn into the back of a t-shirt. He hopes that Victorias Secret and Gap would let Slimline sew the Go Beyond tags into the clothes right next to Victorias Secret and Gaps own labels. Perhaps Victorias Secret and Gap could attract new customers by advertising their ethically manufactured merchandise, identified by 6/- the Go Beyond label. Or would price still be the deciding factor for consumers? Would their shopping mall customers, who will never set foot in a factory in Pannala, Sri Lanka, care as much as the Slimline does?

Article 2

The Arcadia Group, which owns brands including Topshop, Dorothy Perkins and Miss Selfridge, is estimated to have cancelled in excess of 100m of existing clothing orders worldwide from suppliers in some of the worlds poorest countries as the global garment sector faces ruin.

According to data from the Bangladesh Garments and Manufacturing Association (BGMEA), the Arcadia Group has cancelled 9m of orders in Bangladesh alone.

The Worker Rights Consortium (WRC), a labour rights group based in the US, says it believes that the Arcadia Group will have cancelled well in excess of 100m of orders across its global supply chains. It currently sources only 5% of its clothing orders from Bangaldeshi suppliers.

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The effect of order cancellations like Arcadias, which we estimate will cost Arcadias suppliers more than 100m, is to force suppliers into bankruptcy and to leaves thousands of workers without income, says Scott Nova, executive editor at WRC.

The Arcadia Group declined to comment.

WRC also estimated that collectively global brands have potentially cancelled in excess of 20bn of orders worldwide not just from Bangladesh but from other major garment producing countries such as Cambodia, Sri Lanka and Vietnam.

In recent weeks, retailers have been accused of abandoning their garment workforce at a time when many lower-income countries will struggle to provide economic safety nets for millions of low-paid workers.

Last week Arcadia Group, owned by Sir Philip Green, rowed back on the wholesale cancellation of all existing orders. In a letter to suppliers seen by the Guardian, it said that although it had a contractual right to cancel orders that had already been shipped, it would accept those that were in transit on 17 March at a 30% discount. However, all other orders, including clothing that had already been made but had not been shipped, will be cancelled. It is unclear whether the group will agree to pay for raw materials already purchased by suppliers.

In the letter, the group told suppliers it needed to cancel orders because customers will not be willing to buy spring goods out of season and that it would not be able to accept any new stock while its shops remain closed.

In recent weeks, global retailers including Primark, Matalan and Edinburgh Woollen Mill have cancelled billions of dollars of orders from their overseas suppliers.

Data from the BGMEA shows that over 2.4bn of orders have been cancelled or suspended in Bangladesh, leading to over 1 million garment workers losing their jobs or being sent home without pay.

In other major garment-producing countries such as Myanmar, Cambodia and Sri Lanka, hundreds of factories are closing every week and garment workers left without pay as western fashion brands scramble to recoup losses down their supply chain.

The Covid-19 pandemic has really exposed the fallacy of the narrative that fashion brands dont have a direct relationship to the millions of workers in their supply chains, says Thulsi Narayanasamy, head of labour at the Business & Human Rights Resource Centre. Its an incredible demonstration of the impunity and power imbalance that lies at the heart of this industry.

A factory owner in Bangladesh said that Arcadias decision to cancel orders will lead to further job losses as millions of garment workers face destitution.

Their decision to cancel on top of all the other retailers will mean workers lost their jobs, says Mostafiz Uddin, the chief executive of the Bangladesh Apparel Exchange and managing director of Denim Expert, a clothing company that supplies international brands including Topshop in the UK.

What has made their cancellation more harmful is the demand for discounts. This places huge pressure on suppliers like myself in terms of cash flow. We as suppliers expect and accept business disruption at the present time. However, some buyers, including Arcadia, have handled this extraordinarily badly, with absolutely no concern for the financial welfare of their suppliers and implications for their workers.

Question 5 Read the Article 1 above about Slimline & Article 2 above about how the Covid-19 pandemic has disrupted the global supply chain for apparel manufacturers and suggest how apparel manufacturers like Slimline can overcome this challenge.