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Are responsible purchasing practices the key to addressing excessive working hours in the supply chain?

June 6, 2024

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By Zoë Leeming

The ‘long and short’ of working hours risks 

Working hours violations, including excessive hours of work, are one of the most common labor rights issues in the supply chain. Approximately one-third of the global workforce (36.1%) works more than the 48 hours per week established as the conventional maximum by the International Labour Office (ILO). The proportion of workers working excessive hours is more than double in low-income countries as compared with high-income countries. Excessive working hours have significant adverse consequences on both workers and businesses.   

For workers, risks include disturbances in sleep, biological rhythms, as well as family and social life, which have negative effects on fatigue and mood. This ultimately impacts the worker’s health and safety, as well as their performance at work. Where excessive hours are combined with a lack of rest and recovery, chronic effects of fatigue may emerge over time, such as mental health disorders, cardiovascular disease, gastrointestinal issues, and even higher mortality rates. Apart from health issues, excessive work could limit workers’ ability to enjoy a personal life, undertake academic or professional development, and access services such as medical care during work hours. It also increases injury risk. In terms of impacts on business, excessive hours of work are associated with lower productivity due to greater fatigue, decreased job satisfaction and motivation, increased likelihood of occupational injuries and illnesses, and higher rates of absenteeism and staff turnover. 

The root causes of working hours risks are varied and complex; however, a key driver is low wages, meaning that workers often need to work long hours to make ends meet and will seek out opportunities for overtime. Conventional purchasing practices can put suppliers under significant competitive and production pressure, contributing to poor working conditions, including pervasive working hour risks. While brands often have limited direct influence or leverage over working conditions on supplier sites, procurement teams can play a significant role in mitigating adverse impacts on workers in the supply chain through the adoption of responsible purchasing practices.  

The role of responsible purchasing practices 

At the heart of responsible purchasing practices are relationships between brands and suppliers that are built on mutual commitment, collaboration, and communication (see more on Article One’s Three C’s strategy for supply chain partnerships here). Key responsible purchasing practices that support suppliers in addressing excessive working hours risks include shared forecasting and planning, long-term contracts and partnerships, joint business plans, and sustainable costing. Shared planning allows suppliers to better manage production, avoid peak season rush, and not rely on overtime to meet last-minute orders, short lead times, or changed orders. Stable business relationships give factories a reason to invest in improving working conditions, including paying living wages and, in turn, reducing the need for overtime. Collaborating on business plans and costing can help ensure that the price for goods or services includes living wages, as well as accounting for appropriate lead times and fair terms of payment. Increasing suppliers’ financial resilience can also benefit brands by ensuring a stable supply base. 

Companies across various industries are taking steps to introduce responsible purchasing practices, particularly within the apparel sector. This includes creating guidance documents and resources for procurement teams, developing trainings, setting goals and implementing processes around partnership-style relationships with suppliers, assessing existing purchasing practices and introducing roadmaps to advance practices, signing on to common frameworks or commitments, and more. One noteworthy example is outdoor brand Deuter. In response to audit findings of excessive working hours at a backpack supplier in Vietnam, Deuter partnered with Fair Wear Foundation to support its supplier in reducing excessive overtime. Deuter reviewed its internal purchasing and planning processes, shifting from forecasting to fixed orders with longer lead times and as well as placing orders in the low season as opposed to only the peak. This allowed suppliers to plan more effectively and have more even production throughout the course of the year. Instances of overtime were reduced, resulting in increased productivity and efficiency at the supplier. While Deuter does not yet have long term contracts in place, 100% of Deuter’s production volume comes from suppliers where the company has had a business relationship for at least five years, with some supplier relationships in place for more than three decades.  

Introducing responsible purchasing practices within procurement teams continues to be one of the foremost leadership opportunities in the business and human rights space, but remains a highly complex topic, largely because securing internal buy-in requires cultural and business model shifts. However, we are seeing significant momentum among brands to explore the opportunities presented by responsible purchasing practices, indicating a shift towards recognizing how their business models can contribute to poor working conditions in the supply chain, particularly the risks of excessive working hours, as well as a recognition of the business benefits of increased supply chain resilience and sustainability. While there are certainly other best practices for mitigating working hours risks in the supply chain, responsible purchasing practices may hold the key to addressing several of the root causes of this systemic human rights issue.  

If you have any questions or would like to learn more about introducing responsible purchasing practices and other steps you can take to ensure a responsible and resilient supply chain, please contact hello@articleoneadvisors.com