Bharat Ahir, 28 One: “Supply chain transparency cannot be a box-ticking exercise”

The fashion supply chain is a complex construct, involving many steps and stakeholders from sourcing, freight and shipping to market trends and many more in between. Thus, talking to supply chain expert Bharat Ahir, CEO of supply chain management company Two Eight One, is like opening Pandora’s box - you cover one question but it throws open the next one. Plus, one wants to tap into Ahir’s vast knowledge that stems from decades in the industry, that too on both sides of it.

Could you give us a bit of background, how did you end up in your current position?

I have lived in Hong Kong for a long time now after moving from the UK and spending some time in China in between, but in terms of my career in sourcing, it all started as a buyer in retail. I come from a manufacturing family for a UK company called Asda, that is where I started in 1989. It soon became clear that I was much better with operations and relationship building, not on the creative side. So from buying, I moved to a supply and manufacturing role, first for a UK business, then a Japanese one, where I sourced products from the UK, Italy and France for the Japanese market, which then sparked the transition into working in the Far East.

And in the ‘90s, I became the go-to person for another Japanese organisation for Southeast Asia - India, Sri Lanka, Bangladesh and Cambodia. From 1997 onwards, I was spending quite a lot of time in Bangladesh. At that time, Japanese businesses were much into investing, machinery and raw materials. That created a shift into a different experience for partners and for the suppliers as well. And it meant that I gained quite an intimate working practice on the ground. Let’s just say the awareness of how things worked was very different. And the interest, to be frank.

I can imagine. Then, where did your path take you?

In 2000, I started working in retail, then sourcing, which broadened out into the operational management of sourcing, supply chain, quality [working for Woolworths for many years, ed.].Then in 2008, we set up Two Eight One, starting off as advisors, helping people with their sourcing, with restructuring how they bought their product. We built plans, revising them, organising, and then our customers began to ask “well, why don’t you do it for us?” Which is quite common in an advisory role; people ask you to execute the plan.

This continued to a point where we were representing retail brands, setting up offices for them, across specifically Asia, East of India. We specialised in multi-category, multi-country sourcing, mainly for Northern Europe, with a couple of clients in the US. About four years ago, we were working with a UK brand where we became involved with some of their challenges in the supply chain; one being how they managed their product quality.

Pretty quickly we realised that the transparency of their product lifecycle was simply not appropriate, to a point where it caused costly operational issues. For example, one company had eight operations across five countries, all working independently, all working in a fragmented manner. It was reliant very much on the skill and due diligence of individuals as opposed to management.

Thus, we moved into the world of technology. We went out to the existing players in the market. We did not want to build anything initially, we went in as subject matter experts - or so we thought - and we went to the large organisations who were traditional operators. They would offer final inspections on products and audit reports that would take multiple days and were conducted in a manual and binary manner, without analysis or understanding and would not be in real time, meaning that half of the crucial information was missing.

We also worked with tech companies, but they were immature at that time; everything was possible but with very little understanding of the industry and practical reality. We then decided to start building our own platform and that has grown over the last four years to where we are today.

The areas of sourcing and supply chain management are very complex. Where does one even start, what do you advise companies to do?

The truth is, it can be a very complicated business - multiple categories, territories and stakeholders. But it all boils down to people. And our practice over the years has been to be very careful who we work with - and that is true on both ends of the pipe. We try very hard to only work with the kinds of people and businesses who have the same values as us, who want to understand the provenance and integrity of their products. Because if they don’t, there is no point pushing water uphill.

If we think about sourcing responsibly – setting aside consuming responsibly because sourcing responsibly ultimately starts with consuming responsibly – looking for quality (in the broadest sense) is the responsible thing to do because that enables you to consume less and enjoy what you have.

We understand intimately what fast fashion has done to the industry. We also deeply understand that there are ways to care, act and behave responsibly that do not create inefficient business. So it starts with the people.

Do you help companies identify their own people who can take on different roles rather than bringing in someone from the outside?

Yes, but let’s take that question and go back a step. Firstly, who are the stakeholders? Do they care? So there’s finance, the leadership team, the board and the public. The question is, irrespective of the brand, do their stakeholders care beyond filling in reports and filing? That is where technology can be employed.

Once we begin working with companies, we often find that tension exists between the different departments – CSR, ESG, finance and commercial activity. I have only met maybe a handful of brands that are aligned top to bottom. While organisations have individuals, they have functions first, and what one has to understand is if that function creates the environment to act on its findings.

Realistically, sustainable sourcing is not about someone somewhere in a dark room filling in a spreadsheet and loading it onto a platform. And by pushing that accountability further upstream, you are dealing with people who understand the ‘why’ less. So we do help companies but before identifying individuals, the question is, is there a true desire?

Is there?

We have found that many people - due to the complexity - don’t know what is going on today, let alone how to improve it. They simply have a transaction with a supplier and their sole responsibility is to supply to meet their requirements. Those suppliers are of varying models but sometimes there are amazing suppliers who are climbing the value chain; remarkable factories, responsible in their behaviour - be that with their people, with the environment, through the full supply chain.

At the other end, there are people who are only transactional and for them, it is all about getting that invoice paid. Unfortunately, there are many brands that have high levels of desire but low levels of visibility and management.

Where the question comes in - do people want to do the right thing when it costs more?

Exactly, and that is why one of the tasks that we have put on our own shoulders is to demonstrate the efficiency of using technology to do some of the heavy lifting. Our business now focuses on what is happening on the ground: Where is it happening compared to where it should be? When is it happening compared to when it should be? The impact on the business of those things and then, what does it mean for you?

Which areas do companies get started with?

Our experience is that you start with your transaction. What are you buying, where are you buying it? I said those statements for a reason. You start there. And you start with ‘do I truly know where my products are made, how they are made and who is making them?’

I don’t want people filling in forms, I want to know the practice and values that characterise their supply chain. And I can’t be everywhere all the time. So how do I use technology to help and support and who am I working with? Do they want to know more? Because if they do, then what is the structure, what is in it for them? Because engagement upstream of one’s supplier basis is not just sticks, there are also carrots there. Are we rewarding the people who are behaving properly? And the suppliers who want to support our objectives as a brand? And is the supply chain supporting my objectives?

The way we have structured the platform means that we are very much the aggregator of data. We are not judging here, we are just collecting the data for our customers to act on. And that has led to engaging with companies that work not only on the final product but along the production line and the pre-production as well.

This means that the data we have is applicable to the company’s suppliers and can help them get started on the improvements. So, when you begin, you start with the transaction, then you move upstream step-by-step.

After the self-assessment, are companies willing to change? What is the response?

Nobody is perfect. It is a bit like life. All I want to understand is if I have sat with the right people and if their intentions are good. If they are, that is all I need to know. Because when you start peeling away these layers, you are going to find trouble – the best brands in the world have some amount of trouble. But if the intentions are sincere, we will work on it together, through a corrective action plan (CAP), that is the first thing.

The second thing is, we have to be careful how we position this as a business because the data is very powerful. We perform live analytics - everything from the thread used in the product right up to the impact of CO2 emissions, so it is a combination of data and facts. One of the things we have seen is that we have to be careful to be seen as an enabler, not a threat.

Within the client base that we have, we have three profiles that engage within our customers: We have the stakeholders, then we have the leaders of the business, all the managers, and then we have the operators. Obviously, the most important are the operators but they are often also the people who feel most threatened by technology. We have to firstly ensure that everybody knows that the world is not perfect but that one has to demonstrate that one is acting properly. And then, the operating teams see that the data we provide will help and support them do their jobs more efficiently and conscientiously.

Earlier, there was much resistance to share supplier data, even as recently as five years ago. But that has changed. Does that match your experience, is there more transparency now?

Let’s go back to the point earlier about the type of suppliers, especially those suppliers climbing the value chain. Sharing data builds momentum for those suppliers and they are engaging more with clients and getting more business. The challenge is that once the order has been received, to find out who is subcontracting it.

What we do is, we make sure that we get the audit report, we get the address, and we do the deepest tracking available on the market. Once inspections take place, within about 15 seconds, there is global visibility and there is also a generated comparison to the audit report live. So, that visibility of first tier suppliers is brilliant, our working practice is to then ensure that if they subcontract, there is transparency around the working conditions and the sustainability ethics within the subcontractor.

Have you done some firefighting in case of bad publicity at the supplier / brand end?

Of course, everyone has. Anyone who tells you ‘no’, who tells you the world is perfect, is lying. Again, we go back to the first principle - who are you working with? If the leader of that business who a consumer is transacting with wants to do the right thing, then everything can be resolved. Again, it is about intentions and if the intentions are there, we strive to help and support them through change by showing them there is a benefit to that change.

That is why I talked about carrot and stick - supplier rating systems, supplier award ceremonies, supplier long-term partnership agreements should all be based on performance and relationship, which is the road we are taking.

So there has to be a holistic approach?

Yes, and a lot of sincerity. I have seen many vendor self-certification programmes where part of the responsibility of the vendor was absolved by providing a 54-page manual and saying ‘make sure you follow it’. What does that mean to the person receiving it? It doesn’t mean anything. So how are you going to help these people, assuming again you are sat with the right people who want to do the right thing - build a commercial relationship, build their business. To expect somebody to be able to perform consistently, whilst under financial pressure without support is frankly naive.

And then to say, ‘there is this new legislation coming in, we want transparency, and you are going to provide more information’. When given this directive, all these companies will see is more cost and so you have to wonder what is in it for them?

Even those vendors climbing the value chain who want to stand out as purveyors of best practice – in Bangladesh for example, the many sustainable factories with water treatment plants that reuse water and utilise the best dyes – even in that scenario, one has to ensure that there is responsibility but also visibility and control.

Because I will give you support, I will empower you by giving you the agency to do this yourself but I want to know what is going on. And that is the kind of relationship we are navigating with suppliers on behalf of the brands that we are working with. Because the ideal scenario is from a holistic cost perspective to remove duplication. So that is where technology comes in because in an ideal scenario, technology will support the factory to look after itself, with coaching and guidance. Therefore, that function and the people in the team can then move from fire fighting to fire prevention. If you go further upstream, they can begin to look at raw material, moving all the way to tier 3 and start adopting the same practices as opposed to fire fighting all day long.

Last but not least, let’s talk about CSDDD readiness. Is that something that brands and retailers are concerned about?

Yes, I am hearing a lot about it, especially from some French brands because the enforcement of the legislation came into effect in France. The concern for them is – and this is my exercise with every client I sit with – is this a box-ticking exercise or do you actually want full transparency? Many people get stuck in that place of ‘oh my goodness, what are we going to do?’ but they need to demonstrate to the stakeholders that they do care and that things may not be perfect but we are working on it.