Supplier Scorecards: A Strategic Tool for Apparel Brands Seeking Transparency and Accountability

In the fashion industry, where reports of overproduction, human-rights violations, and unethical sourcing practices are all too common, transparency has become a critical priority. Consumers and regulators are also demanding more sustainably produced goods and lower emissions, pushing companies to scrutinize not only their own operations but also those of their business partners. Sheng Lu, a professor and director of graduate studies at the University of Delaware’s Department of Fashion and Apparel Studies, told Supply Chain Dive that fashion companies increasingly need to assess and record their operational processes and impacts, as well as those of their partners.

Supplier scorecards have emerged as a vital tool in this effort. By using these scorecards, fashion companies can obtain standardized data that is cost-effective to collect and easy to analyze, experts told Supply Chain Dive. Scorecards also facilitate consistent and transparent conversations around measurable performance for brands like Patagonia.

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

Choosing the Right Metrics

Scorecards can help companies build successful supplier partnerships by providing a structured way to exchange feedback, improve relationships, and align goals, according to Robert Conradt, VP of Sourcing and Manufacturing at Brooks Running. For the athletic gear company, supplier scorecards proved superior to informal feedback shared during quarterly business meetings, which had been less effective.

Brooks uses an internal scorecard to rate the performance of its tier 1 and tier 2 footwear vendors across eight categories, including manufacturing quality, responsible sourcing, and sustainability. Conradt explained that the company selected metrics based on what was most meaningful to Brooks’ business and values, spending several years refining them. Each metric measures performance over a full calendar year or two product seasons (spring and fall).

“Our supplier quality team developed the inputs to our scorecard by first defining our internal critical business needs, determining how that would be measured, and then working backwards to identify the measurable parameters from our suppliers that impact or correlate to those needs.”

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

However, Conradt noted that Brooks’ internal purchasing practices can sometimes complicate supplier compliance with social and environmental laws, regulations, and its own code of conduct. To address this, Brooks partners with the nonprofit Better Buying Institute, which allows suppliers to anonymously rate buyer purchasing practices, including the accuracy of demand planning and forecasting. Brooks reviews these assessments to identify areas for improvement.

Implementation Strategies and Challenges

Like Brooks Running, beauty product maker Estée Lauder Cos. uses supplier scorecards to measure factors such as quality, service, innovation, and sustainability performance, VP of Supplier Quality Daniel Dowd told Supply Chain Dive. The measurements help the company monitor its value chain to assess risks and improvement opportunities.

Patagonia leverages supplier scorecards to assess production, product quality, and social and environmental impact. Mast and Savage emphasized that “it is important for us that we don’t measure performance in silos.” For the outdoor apparel company, this means evaluating on-time delivery, defective rates, social and environmental audits, and efforts toward renewable energy.

Implementing supplier scorecards requires a unified system to share data and information. Creating such a framework can be challenging, but apparel executives say the key to success is transparent communication. Patagonia, for instance, had to decide how to provide effective feedback in-person versus via email. By adopting a thoughtful and transparent approach, the company doesn’t “often see pushback” and can support suppliers in areas needing improvement.

“Both of these systems together allow us to have complete conversations — we aren’t just evaluating them, but they, too, share areas of improvement for us,” Mast and Savage said.

Some companies use different avenues when rolling out scorecards. Estée Lauder, for example, combines one-on-one supplier reviews, town hall meetings with suppliers, and information assessments within supplier portals.

Compliance remains a challenge. Patagonia noted two instances where it had to work with suppliers to provide onsite support to remediate issues. While many suppliers are eager to improve, some are unable to do so effectively even with support. In cases where a relationship doesn’t align philosophically and puts product quality at risk, a company may decide to stop working with the supplier.

Filling in the Gaps

Despite their popularity, supplier scorecards are not perfect. According to research from Sheng Lu, even large U.S. fashion companies sometimes lack the ability to collect sustainability data beyond their tier 1 suppliers. This can lead to inconsistent data quality, especially when combined with a lack of industry-wide standards and data complexity, Lu said.

Third-party audits and sustainability certifications offer solutions. Earlier this year, outdoor apparel and accessories brand Cotopaxi completed a remediation initiative for a tier 1 supplier after a 2022 third-party audit discovered unethical recruiting practices. Cotopaxi and other brands using the same supplier engaged a third-party audit and remediation consultancy to address the risks.

Others opt for online scorecard and rating platforms like EcoVadis. Estée Lauder uses EcoVadis to assess suppliers’ ESG journeys, identify areas for improvement, and navigate ESG risk, said Mindi DeLeary, VP of global responsible sourcing, sustainability and upstream procurement at the company.

While the journey to a sustainable and ethical fashion supply chain is long, supplier scorecards can be a useful tool along the way. As Estée Lauder’s Dowd put it: “Scorecards help us understand and evaluate the performance of our suppliers in a tangible, consistent and scalable way.”

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