Better Buying Commercial Compliance TrackerTM provides benchmark for future scores, and is published as part of BBI’s participation in Sustainable Terms of Trade Initiative
Research from Better Buying Institute published today finds that measures of commercial compliance on the part of global brands and retailers are significantly and positively correlated.
The first annual Better Buying Commercial Compliance TrackerTM has been developed as part of Better Buying’s participation in The Sustainable Terms of Trade Initiative, and measures adherence to minimum levels of performance outlined in key recommendations set forth by manufacturers as central elements to the terms of trade they wish to do business under – purchasing practices that do not cause them ‘obvious and avoidable harm.’
The survey includes 11 questions that measure specific practices and expected performance for the key recommendations, and uses net promoter type scoring to calculate a composite score reflecting the proportion of ratings that indicated that buyers were in compliance ‘all of the time’ as opposed to ‘never’, ‘rarely’, or ‘sometimes.’ Possible commercial compliance scores range from -100 to +100, and the score for this year’s ratings cycle is +29.4.
The findings identify four specific practices where compliance is significantly correlated to compliance to every other key recommendation, and where brands and retailers committed to improving their purchasing practices can focus their efforts. These are paying prices in full, allowing changes to be made to prices being paid to suppliers when external costs fluctuate, paying prices that cover all the costs of compliant production that enables the supplier to make a reasonable profit, and confirming capacity in advance.
Dr. Marsha Dickson, President and Co-Founder of Better Buying Institute, comments: “The patterns of behavior we observed, with most practices either being compliant or not, enables suppliers to better identify, and avoid if their business allows, buyers who will strain their businesses and add to the pressures on workers in global supply chains.”
“The correlation of a number of practices related to pricing may help solve the issue of paying living wages. Brands committed to that goal should pay much attention to these in their work with suppliers. These and other measures are high impact areas for the industry to focus on, and Better BuyingTM stands ready to help brands and retailers begin measuring their commercial compliance so they can identify and mitigate areas where they are deficient.”