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COVID-19 and The Warehouse Group Supply Chain

As most readers will know COVID-19 has had a profound impact on Supply Chains Globally. Most of The Warehouse Group’s own label suppliers are based in China, Bangladesh, India, Vietnam, and Malaysia.

The first factory lockdowns began in China in February 2020 followed by a further wave of factory lockdowns in other parts of Asia in the following months.

Here in New Zealand our own stores were fully closed from March 25 . We re-opened for essential product online sales only in April, and finally fully opened our physical stores under COVID-19 alert level 1 on June 8th.

These waves of restricted economic activity presented multiple overlapping supply chain challenges to manage. With the first wave of factory lockdowns in China we were faced with delayed availability of future orders and then when the NZ lockdown and trading restrictions commenced we encountered an inverse dilemma – a wave of pending inventory we could not trade. Once the NZ retail market was fully opened again a snapback surge in consumer spending created an inverse challenge again as our planners and sourcing teams raced to recalibrate the conservative forward procurement plans we had put in place to offset the collapse in revenue during lockdown.

A similar whipsaw was visited upon our suppliers who encountered a revenue deficit through a wave of customer order cancellations or deferments along with the productivity losses of their own factory closures during the regional peaks of the epidemic.

As with our own business It has been impossible to mitigate all the negative impacts on our suppliers and their workforce. We typically only represent a small share of their business and can’t control other customers actions. However, we have strived to balance commercial imperatives and our core value – to always do the right thing.

This is what we have done :

  • Honoured payments due for goods already produced or where materials had been purchased
  • Provided supplier access to prompt payment facilities through our banking partner
  • Allowed factories to self-inspect goods and ship without delay - waiving our usual 3rd party inspection requirements
  • Restricted our own Asia based team members business travel and supported their work from home needs to ensure their COVID-19 Safety
  • Distributed COVID-19 safe resource kits prepared by our industry partners – ELEVATE , Her Project, and The Responsible Business Alliance – to supplier factories.
  • In the case of India , Bangladesh , and Pakistan – the most sustained high COVID impacted regions – contacted factories directly to confirm and track their COVID-19 management practices, confirmed they were meeting all payment obligations to their workforces and operating in accordance with any government guidelines.
  • Surveyed some supplier groups to assess COVID-19 impacts on their production and capacity.
  • Continued to deliver our Ethical Sourcing programme elements of ELearning, Vendor training, and Corrective Action Plan management remotely.
  • Reviewed and benchmarked our own actions against international calls to supply chain action such as the Tear Fund COVID-19 Commitments and the ILO Call to Action

[1] Pertains only to The Warehouse Group’s offshore private label supply chain