Transparency is crucial in the fashion industry. The industry has long been plagued byoverproduction、human rights violationsandunethical sourcing practicesamong other issues.

At the same time, consumers and regulators are pushing for moresustainably manufactured productsandlower emissions. Sheng Lu, professor and graduate program director in the Department of Fashion and Apparel Studies at the University of Delaware, told sister publication Supply Chain Dive that apparel companies are therefore increasingly required to assess and document their own operations and impacts as well as those of their business partners.

Supplier scorecards are one of the key tools for gaining this kind of visibility.

Experts point out that with scorecards, apparel companies can obtain standardized data that is low-cost to collect and easy to analyze. Scorecards also facilitate consistent and transparent conversations with brands such as Patagonia around measurable performance.

"We prefer scorecards because other options can be more subjective, making it harder to accurately and objectively measure performance and long-term improvement," said Elisabeth Mast, senior director of sourcing and production at Patagonia, and Wendy Savage, director of social responsibility, traceability, and animal welfare.

Choosing the right metrics

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

For this athletic equipment company, supplier scorecards are superior to the informal feedback shared in quarterly business meetings, which proved to be less effective.

Brooks uses an internal scorecard to rate the performance of its Tier 1 and Tier 2 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 across 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 the supply base that influence or relate to those needs, in order to develop the scorecard inputs."

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

However, Conradt noted that Brooks' own sourcing practices can create complexities for suppliers in complying with social and environmental laws, regulations, and their own codes of conduct.

To address this issue, 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 evaluations to identify areas for improvement.

Similar to Brooks Running, cosmetics manufacturer Estée Lauder uses supplier scorecards to measure multiple factors, including quality, service, innovation, and sustainability performance, according to Daniel Dowd, vice president of supplier quality at Estée Lauder.

"Our supplier quality team first defines internal critical business needs, determines how to measure them, and then works backward to identify measurable parameters in the supply base that influence or relate to those needs," he said. These metrics, 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 impact. Mast and Savage noted, "For us, it's important not to measure performance in isolation."

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

Implementation details and challenges

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

In Patagonia's case, the company had to decide how to develop strategies to effectively differentiate between in-person feedback and email feedback. Through a thoughtful and transparent approach, the company "rarely encounters resistance" and has the opportunity to provide 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 implementing supplier scorecards. For example, Estée Lauder combines multiple strategies, including one-on-one supplier reviews, all-supplier meetings, and information assessments within the 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 can still be a challenge.

Patagonia mentioned two cases where it needed to work with suppliers, providing 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 relationships where there is a misalignment of values and product quality is at risk, the company may choose to end its partnership with that supplier.

Filling data 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 1 suppliers.

Lu said this can lead to inconsistent data quality, especially in the absence of industry standards and when data is complex.

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

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

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

Earlier this year, outdoor apparel and accessories brandCotopaxi completed a remediation plan for a Tier 1 supplier. This followed a third-party audit in 2022 that found unethical recruitment practices at the supplier. To address the violation, Cotopaxi, along with other brands using the same supplier, hired a third-party audit and remediation consulting firm to help manage 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 progress, identify areas for improvement, and manage ESG risks, said Mindi DeLeary, vice president of global responsible sourcing, sustainability, and upstream procurement at Estée Lauder.

While 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 tangible, consistent, and scalable way," said Dowd of Estée Lauder.