Ethical Sourcing & MEC: Collaborators Wanted

Deng Xiaopeng didn’t care if a cat is black or white as long as it catches mice. What Mao’s successor meant was it isn’t important whether China’s economy is centrally planned or market based. What matters is that it creates jobs and feeds its people.

Right now I’m on the KCR train from Kowloon to Shenzhen. Shenzhen is neither black nor white. It’s grey, sprawling and awkward. Forty years ago it was just a sleepy fishing village probably with crystal blue skies. Thanks to Deng’s pragmatism, it’s now a booming commercial centre with hundreds of factories and service sector firms. It has the second biggest port after Shanghai with a population of over 8 million and a GDP of just under 80 billion (CDN$).

Shenzhen like the majority of China’s major urban centres is habitually blanketed by smog and pollution. Beneath the haze is a city oddly planned. It sprawls like an American city but is intermittently broken by tracks of green space and congested concentrations of smoky factories, condo high rises and huge office towers. Urban planning in Shen Zhen has a rushed feeling to it. Kind of like its accelerated economic growth.

MEC has one contract factory in Shen Zhen. My trip today is to meet a locally based compliance firm to help us crack the wage and payroll issues of this important long term factory. To achieve greater leverage with our supplier, we’re tag teaming with a big US brand to motivate the factory to be more transparent and compliant. Tag teaming is the “in thing” for compliance. The logic is to get all the brands (nee customers) of a factory to conduct one uber audit and negotiate one master improvement plan. This will drastically reduce the number of audits a factory undergoes (sometimes up to 12 or more a year) and harmonize often contradicting demands by customers (e.g., direction a door swings open). This will save time and money for factories and brands.

If it takes 10 paces to realize this lofty goal, we (industry) have gone two steps. MEC is working with 20 brands on this (all American). Getting brands to want and ask for the same thing from a factory is tough. It’s like herding cats. Each brand has its own timelines, priorities, liability concerns and of course egos. We all want the world of “supply chains” to get better but given our competitive nature, we want our brand to achieve it first (and hence have first dibs on bragging rights). This I’ve noticed tempers the depth of our collaboration.

The legacy of Deng, catching mice – prevails everywhere in China. Creating jobs and feeding a population of over 1 billion remains paramount. And it doesn’t matter if the cat is black or white. Maybe that’s a lesson Western brands can take from the Chinese: focus on the goal and let’s not worry who gets there first.