The Footwear Distributors and Retailers of America (FDRA), America’s largest and most respected footwear trade association, partnered with the firm ELEVATE to produce its 5th Factory Survey Analysis. The recently completed report provides in depth data and analysis on social compliance issues impacting the footwear industry. The report is unique in that it surveys factories in China, where over 80% of footwear is produced for the U.S. market to get a clearer view of what is happening on the ground. The report contains data from 110 factories across China.
FDRA has released the report to members and is providing the info graphic covering the data to the public. The info graphic can be found here: http://fdra.org/wp-content/uploads/2014/06/Factory-Survey-Analysis-2014-SUMMARY.pdf
FDRA Members can access this special report in FDRA’s Intel Center under the header “Factory Compliance Program”. If you do not know your user name and password, please contact Andy Polk.
“This is our fifth year producing this valuable report for FDRA members. The goal of the survey was to gain insight into the current state of footwear production in China and to develop a better understanding of how factories are managing the various challenges facing the industry,” said FDRA President Matt Priest. “If we can better help our members understand what issues factories face and what challenges they prioritize, we can enhance industry communication and more effectively work with factories in a collaborative way. As recent events at footwear factories have shown, understanding the complex challenges both workers and factory owners face is vitally important to the overall success of our industry.”
Some takeaways from the report
FDRA’s survey reveals a strong sense of optimism amongst factories about their business prospects, but it also indicates that they are facing challenges related to seasonal production fluctuations, raw material costs and shrinking labor pools. An increasing number of factories cope with some of these challenges by providing longer working hours to workers as well as hiring juvenile workers and workers of retirement age – coping strategies that increase the risk of non-compliance with the social performance requirements of buyers. Wages also continue to be one of the top challenges for Chinese footwear manufacturers. Of the surveyed factories, 11% do not pay legal minimum wage.
The report shows that pure compliance audits are not enough to tackle these compliance risks, and it reveals how functioning communication and integration mechanisms have a positive impact on worker retention.
FDRA’s Factory Survey has shown for several years now that failing to meet wage and benefit requirements on a consistent basis is a rather common challenge amongst footwear factories. On the other hand, the survey provides data that shows that investing in strong internal communication systems and worker integration are more effective ways of overcoming industry challenges. Well-functioning communication and integration systems have positive impacts on worker retention and can therefore help factories deal with the worker shortages, seasonality and compliance requirements.
Like in years past, the survey provided a much-needed insight into the hindrances and progress made by the Chinese footwear manufacturing industry. Appropriate action and efforts from FDRA, buyers and manufacturers will be required to ensure that factories understand the importance of continuous improvement and strive to drive positive change throughout the supply chain.
Founded in 1944 by the footwear industry, the Footwear Distributors and Retailers of America (FDRA) is the largest, most effective and respected footwear trade association in the US. It represents and serves the entire width of the footwear industry from small family owned footwear businesses to global footwear companies. It also represents and serves the full supply chain of the footwear industry from research, design and development, to manufacturing and distribution, to retailers selling to consumers all over the globe. It supports more than 100 companies and over 200 brands.
ELEVATE is a global professional services firm that specializes in supply chain social, environmental, and business performance. A recognized industry thought leader, ELEVATE believes that sustained impactful improvement in social and environmental performance requires sincerity of intent and a responsible balance between maximizing financial return and meeting supplier responsibility requirements. ELEVATE calls this: Business Driven Sustainability. ELEVATE’s mission is to help brands and retailers design and implement customized programs that identify risk and improve supply chain performance. ELEVATE strives to help companies for from reactive to proactive and predictive.