UNIQLO Is In Crisis And Human Cost Is Gradually Improving.

The Hongkong private sector university student teacher monitoring unscrupulous enterprise action (hereinafter referred to as SACOM) released a survey report: two UNIQLO suppliers in Guangdong have problems such as overtime labor.

The report points out that the ironing workers of Dongguan Tongwei Garments Co., Ltd., which provide commodity sewing for UNIQLO, need 600 to 700 shirts every day. The ironing cost of each shirt is only 0.29 yuan. The fabric exchange company (Panyu) textile printing and dyeing Co., Ltd., which provides fabric for UNIQLO, requires some workers to sign the "voluntary overtime application form", which indicates that overtime hours are 119.5 hours, which violates the provisions of the labor law of China on "workers can not work overtime for more than 36 hours per month".

In addition, the two factories also have environmental problems such as high plant temperature, full sewage, unsafe equipment, poor ventilation system, dust and chemical smell in the air.

Just such a NGO report is not enough to create a big crisis for UNIQLO brand, but they are increasingly faced with the fact that the cost pressure is surging, and this kind of low technology processing industry has been very difficult to survive without any effort.

In fact, in order to avoid such a situation, Brand Company basically has a set of perfect process standards for supervision of agent management, and will assign employees or hire third party companies to conduct two factory inspection of hardware and software.

The working conditions of the factory and the conditions of the dormitory canteen belong to the hardware category. Whether the child labor is hired, whether the workers are paid for social security, and whether there is overtime work, belongs to the scope of software research.

In the 2014 CSR (corporate social responsibility) report of the fast retailing group of UNIQLO parent company, it is also mentioned that if the regular audit is not qualified, the partners of C level evaluation will be re examined within six months. If there is still no compliance, there will be another audit opportunity after half a year, and still will not be up to standard, which will be cancelled.

Suppliers with D grade evaluation must be re examined within 1 months when the first audit is not up to standard, and there will be no second chance of failure.

The foundries may also face difficulties.

"At present, there are no problems in the hardware industry of the larger garment factories in China. The main reason is that the software can not meet the requirements of the brand."

Sun Tao, who has been engaged in garment foreign trade for many years, told reporters.

His company will help Chinese garment suppliers undertake international brand processing orders, and has many experience with brand manufacturers to inspect factories.

According to Sun Tao, there are already a number of companies specially designed to help factories make false testimony against Brand Company.

They will make a complete list of workers, and make corresponding correspondence time and income for their commuting hours, so that they can make a secret of the information of the factory workers.

Even

There are also ways to investigate employees' one-stop conversation during the factory inspection: the third party companies or factories that provide false information will first look for workers, tell them the direction they should carry out, and the interests that will arise after they tell the real situation of the brand.

"Overtime work is not against the will of the workers. The textile industry is piecework wage, so their income is directly linked to the labor time," Sun Tao said. "If the brand workers demand for labor hours, many factories will go bankrupt."

Cost is always a major criterion for supplier selection.

How to reconcile the growing labor costs in China and the lower purchasing prices needed by clothing brands is a big problem for suppliers.

"Current China

The monthly salary of a worker is about 600 to 700 dollars, Vietnam is 120 to 200 dollars, Bangladesh is only 100 dollars.

Sun Tao said.

In the garment processing industry, Chinese suppliers have lost their advantages. After 90 workers are more willing to go to a more relaxed electronic industry, and the industry has a "wrong ten penalty" unwritten rule: a factory may receive a profit of only 5% of the list, but once there is a late order or quality problem, there will be 30% to 50% deductions.

On the website of SACOM, in addition to UNIQLO, A&F, H&M, Levis, Gap, Nike, Martha and other international brands are also in the list.

On the day of the report of SACOM, XXX confirmed the content of the report, and announced the specific rectification proposals for the two suppliers in a follow-up statement 4 days later.

"Although there were some problems in the monitoring of the labour environment of the cooperative factories, some problems had not been improved.

XX Group will continue to strive to ensure that the problem is improved. "

Fast marketing group told reporters.

In the face of growing costs, XXX group and its suppliers have also held meetings to discuss how to cultivate technology, improve processes and enhance staff skills.

"Japanese companies still have the tradition of using suppliers as partners to help suppliers improve their internal processes."

Sun Tao said.

A long-term cooperative contract will be signed with China's foundries, and some strategic partnership will be formed.

However, it is worth noting that the fast fashion brand, which appeals for low price and fashion, is also gradually weakening its reliance on Chinese suppliers for further reducing costs and risks.

Shortly after the SACOM's report was released, it was reported that Xun marketing group started producing "UNIQLO" casual wear in India factory in January this year, and the first batch of garments will be listed in Japan in March.

The advantage of China's garment processing industry is that the industrial chain is more concentrated.

Besides garment processing, the supply of raw materials for fabrics and accessories is also perfect.

Many of the garment accessories in Southeast Asia still need to be imported from China, which slows down production speed and is not conducive to fast clothing.

"If the whole industrial chain of Southeast Asia's clothing industry has been built up rapidly in the past two years, China's garment manufacturers will soon lose their advantages even if they move to areas with lower labor costs," Sun Tao said. "The apparel foundry industry is a low technology, low threshold industry, and it will turn to a country with low labor costs."

In the stores of Zara, H&M, the place of origin has changed from China to Vietnam and other Southeast Asian countries.

According to Japanese media reports, the proportion of uniformed products made in China in 2013 has dropped from 90% in 2008 to 70%. In the future, it plans to produce 1/3 products in countries other than China. Although UNIQLO said it would not reduce the number of suppliers in China, with the gradual increase of its labor costs, some of the management risks arising therefrom may accelerate the process.