The Brazilian textile industry represents 10% of the nation’s industrial GDP, and it is also the second-largest employer in the country. Despite its importance, fashion is ranked second as the industry with most cases of forced labor or conditions similar to slavery.
As an effort to fight this problem, in recent years, brands and manufacturers in the textile industry have been auditing production sites. Because of the lack of integration between the actors of this production chain, auditings is still very inefficient, as it involves high costs and offers a vast scope of error.
There are three main problems in the current audit model.
Because workers and auditors have a strictly professional, non-anonymous, and punctual relationship, there is no way to guarantee the veracity of the worker’s account. Moreover, in most cases, only a few workers are interviewed by the auditor, which makes the picture incomplete since it does not reflect the overarching reality of the production process.
Besides the possibility of human error and fraud, the current model has low auditing frequency (once a year), depends on third party institutions, and is very expensive. This scenario translates into inefficiency and generates doubts for the stakeholders since the benefits become unclear.
The third and most critical problem with this type of auditing is the lack of interface between the market and society. Since the whole process, from production to consumption, is not available and transparent for end consumers, key actors do not have adequate information to demand better conditions for workers or to make better consumption choices.
In addition, the fashion industry involves many intermediaries: seamstresses, workshops, factories, suppliers, brands. This amount of people makes it difficult to monitor all business productivity in a clear, integrated, and efficient manner.
Addressing this situation means taking on a number of challenges: How to connect actors in the supply chain, bringing business efficiency, predictability of delivery, and inventory? How to offer visibility to the production processes, and therefore give voice to the last mile of the chain? How to empower seamstresses and improve their working conditions?
To solve these problems and reverse this scenario, Blockforce – a Brazilian blockchain researcher and builder and general member of Hyperledger – in partnership with C&A Foundation, Instituto E and COPPEAD-UFRJ, developed a blockchain-based solution called Fair Fashion. Designed using the Hyperledger Fabric framework, this solution promotes visibility and accountability in the fashion supply chain, with the goal of improving working conditions and the efficiency of processes in the production chain.
This is done through the publication of indexes that explain correlations between demographics, working conditions, and stability in the supply chain based on traceability of order matching with a monthly census with workers at the end of the production chain.
The Fair Fashion solution works on three fronts:
Firstly, Fair Fashion offers workers an app to report their work conditions. By answering a monthly questionnaire, the respective workers involved anonymously provide an update on the working conditions behind all orders placed during the month.
The second tool is an app for the actors on the business side to trace orders status and conditions. The orders placed by brands are captured by suppliers and then by factories, providing visibility to all production processes as well as the accurate and transparent order status for the entire chain.
Finally, a Dashboard that integrates the data obtained by the two sources of Fair Fashion’s apps provides an overview of all available data. On the Dashboard, each stakeholder – brands, suppliers, or workshops – has its customized visualization.
Chained and dependent, the solution consists of two interfaces, the business interface and the social responsibility interface. Together they offer the cross view of data necessary to establish the interdependence between flows, and therefore accuracy in verifying the exposed indexes.
The business interface integrates the flow between brands, suppliers, and workshops. It allows the organization to monitor the order status – the number of products produced and delivered, current order status, and its immutable history. It may check, in an organized manner, all documentation of the establishment, including whether it is up to date or pending, and, finally, monitor the current situation of employees.
On the other hand, the social responsibility interface is a reflection of the survey answered by workers through the app. It provides the workshop’s evaluation according to the workers’ perspective, considering the following segments: physical space, health, safety, labor relations, and working conditions.
All information in both interfaces can be viewed on the Hyperledger Fabric-powered blockchain.
The Fair Fashion solution provides benefits for all stakeholders in the chain and, ultimately, for the sector in general since it is based on efficiency and social impact. By collecting data with higher frequency, greater accuracy, and less cost, brands have visibility throughout the chain, enabling preventive actions and helping to predict deliverability and storage. Workshops and suppliers monitor their productivity and social indicators and can improve their dialogue with brands and society. Finally, by answering an anonymous and confidential survey about working conditions, workers can report their situations, guarantee job stability, and participate in a consolidated network that gives a voice to their needs and realities, which are not always assisted.
Fair Fashion is a project sector initiative along with C&A Foundation/ Laudes Foundation, E institute and COPPEAD-UFRJ. It is released in its first version. We’re facing the homologation phase for scale implementation. We are advancing tests on brands and actors that aim for this type of innovation in their chains.