Transparency is crucial in the fashion industry, which has long been plagued by reports ofoverproduction、human rights violationsandunethical sourcing practices.

Additionally, as consumers and regulators push for moresustainably manufactured productsandand lower emissions, apparel companies increasingly need to assess and document their own and their business partners' operational processes and impacts. Sheng Lu, professor and graduate director of the Department of Fashion and Apparel Studies at the University of Delaware, told Supply Chain Dive that supplier scorecards can be a key tool for gaining such visibility.

By using these scorecards, apparel companies can obtain standardized data that is low-cost to collect and easy to analyze, experts told Supply Chain Dive. Scorecards also facilitate ongoing, transparent conversations around measurable performance, such as those used by brands like Patagonia.

"We prefer scorecards because other options can be more subjective and therefore harder to measure performance and improvement over time accurately and objectively," Elisabeth Mast, senior director of sourcing and production, and Wendy Savage, director of social responsibility, traceability, and animal welfare at Patagonia, told Supply Chain Dive.

Choosing the right metrics

Robert Conradt, vice president of sourcing and manufacturing at Brooks Running, said scorecards can help companies build successful supplier partnerships by providing a channel for sending and receiving feedback, improving relationships and aligning goals.

For the athletic equipment company, supplier scorecards are preferred over informal feedback shared in quarterly business meetings, which proved ineffective.

Instead, Brooks uses internal scorecards to rate its tier-one and tier-two footwear suppliers across eight categories, including manufacturing quality, responsible sourcing, and sustainability.

Conradt said the company selects metrics based on what matters most to Brooks' business and values, and has spent years evolving the metrics to their current state. Each metric measures performance over the entire calendar year or two product seasons (spring and fall).

"Our supplier quality team first defines internal critical business needs, determines how to measure them, and then works backward to identify measurable parameters in suppliers that influence or correlate with those needs, thereby developing the inputs for the scorecard."

—Daniel Dowd, Vice President of Supplier Quality at Estée Lauder Cos.

However, Conradt noted that Brooks' own sourcing practices can complicate suppliers' compliance with social and environmental laws, regulations, and its own code of conduct.

To address this, Brooks also partners with the nonprofit organizationBetter Buying Instituteto enable suppliers to anonymously rate buyers' sourcing practices, including the accuracy of demand planning and forecasting. Brooks reviews these assessments to identify areas for improvement.

Similar to Brooks Running, beauty products manufacturer Estée Lauder Cos. uses supplier scorecards to measure multiple factors, including quality, service, innovation, and sustainability performance, Daniel Dowd, vice president of supplier quality, told Supply Chain Dive.

"Our supplier quality team first defines internal critical business needs, determines how to measure them, and then works backward to identify measurable parameters in suppliers that influence or correlate with those needs," he said. These measurements, in turn, help the cosmetics company monitor its value chain to assess risks and opportunities for improvement.

Similarly, Patagonia uses supplier scorecards to evaluate production, product quality, and social and environmental impacts, Mast and Savage said, noting that "for us, it's important not to measure performance in isolation."

For the outdoor clothing company, this means assessing on-time delivery rates, defect rates, social and environmental audits, and efforts in renewable energy.

Implementation details and challenges

Supplier scorecards require a unified system for sharing data and information. Creating such a framework can be challenging, but transparent communication is key to successful implementation, apparel industry executives said.

For example, Patagonia had to decide how to strategize providing effective feedback between in-person and email. Through a thoughtful and transparent approach, the company "rarely encounters resistance" and has opportunities to offer support in areas needing improvement.

"Together, these two systems allow us to have a complete conversation—we not only evaluate them, but they also share areas where we need to improve," Mast and Savage said.

Some companies take different approaches when rolling out supplier scorecards. For example, Estée Lauder combines multiple strategies, including one-on-one supplier reviews, supplier town halls, and information assessments within a supplier portal.

"Together, these two systems allow us to have a complete conversation—we not only evaluate them, but they also share areas where we need to improve."

—Elisabeth Mast and Wendy Savage, Patagonia executives

However, compliance remains a challenge.

Patagonia mentioned two cases where they had to work with suppliers to provide on-site support to correct issues.

While many suppliers are eager to improve and resolve issues, some cannot do so effectively even with support. In cases where relationships are philosophically misaligned and product quality is jeopardized, the company may choose to stop working with that supplier.

Filling the gaps

Although supplier scorecards are a popular and often successful sourcing strategy, they are not perfect. According to Lu's research, even large U.S. apparel companies sometimes lack the ability to collect sustainability data beyond tier-one suppliers.

This can lead to inconsistent data quality, especially when combined with a lack of industry standards and data complexity, Lu said.

However, solutions are available: third-party audits and sustainability certifications.

"Scorecards help us understand and evaluate supplier performance in a concrete, consistent, and scalable way."

—Daniel Dowd, Vice President of Supplier Quality at Estée Lauder Cos.

Earlier this year, outdoor clothing and accessories brandCotopaxi completed a remediation program for a tier-one supplierafter a third-party audit in 2022 found unethical recruitment practices at that supplier. To address the violation, Cotopaxi and other brands using the same supplier hired a third-party audit and remediation consulting firm to help navigate the risks.

Other companies opt for online scorecard and rating platforms such as EcoVadis. For example, Estée Lauder uses the platform to assess suppliers' ESG journeys, identify improvement areas, and manage ESG risks, said Mindi DeLeary, vice president of global responsible sourcing, sustainability, and upstream procurement at the cosmetics company.

Although some companies have made progress, the road to a sustainable and ethical fashion supply chain remains long. However, supplier scorecards can be a useful tool along the way.

"Scorecards help us understand and evaluate supplier performance in a concrete, consistent, and scalable way," Estée Lauder's Dowd said.

This article first appeared in our Procurement Weekly newsletter.Sign up here。