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Jewellery maker Erin Fitzpatrick’s small company will soon outgrow its studio at the Toronto Fashion Incubator, and outsourcing to a third-party manufacturer is a tempting prospect. (Jennifer Roberts For The Globe and Mail)
Jewellery maker Erin Fitzpatrick’s small company will soon outgrow its studio at the Toronto Fashion Incubator, and outsourcing to a third-party manufacturer is a tempting prospect. (Jennifer Roberts For The Globe and Mail)

THE CHALLENGE

Avoiding the dark side of outsourcing Add to ...

Each week, we seek out expert advice to help a small or medium-sized firm overcome a key issue.

Erin Fitzpatrick has great plans for her Toronto company, Bel Ami School Headbands, which makes customized jewellery and hair accessories for private girls schools and three universities.

For instance, she wants to add items for men, including cufflinks and tie clips. She would also like to be in nine Canadian universities by next year and then expand globally, starting with the United States.

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She launched the company in 2009 in her parents’ basement with mentoring and a $3,000 grant from the Ontario Ministry of Economic Development, Trade and Employment’s Summer Company Program, which is geared to student entrepreneurs. Today she has two to four employees, depending on workload.

Ms. Fitzpatrick will soon outgrow her studio in the Toronto Fashion Incubator, a non-profit group dedicated to nurturing small entrepreneurs. It’s a “beautiful spot in a heritage building with lots of windows and lots of space,” she says. She is proud to offer a clean, safe work environment, a hands-on approach to management and fair wages.

She ensures that her employees – mostly students and recent graduates – are recognized for their accomplishments and allowed to express their creativity. “From the beginning, it has always been important to me to produce an extremely high quality product in a socially responsible way,” she says. “In my industry, employee well-being is the most critical aspect of social responsibility.”

Continued growth, however, could necessitate the outsourcing of manufacturing to a place where she would not be able to monitor the work environment and conditions. She would like to continue ethical manufacturing practices with a dedication to corporate responsibility that she knows will be a selling point, as she is targeting a young demographic that is increasingly embracing sustainability and fair trade.

But she is not sure exactly how to define her goals. Ethical manufacturing means making sure subcontractors are treating their employees well and compensating them fairly. It can also mean sourcing materials made to ethical standards or supporting charitable and environmental causes.

THE CHALLENGE: How can Ms. Fitzpatrick’s jewellery company continue to grow yet adhere to ethical manufacturing standards?

THE EXPERTS WEIGH IN

Andrew Crane, director, Centre of Excellence in Responsible Business, Schulich School of Business, York University, Toronto

Apparel companies like Canada Goose and American Apparel do all their manufacturing in-house, provide their employees with superior working conditions, and still manage to outperform many of their rivals.

 Whatever Ms. Fitzpatrick decides, she will find that there is no shortage of information. In fact, there are so many different labour standards and systems of verification that it can be difficult to know where to start. Becoming a member of the Canadian network of the UN Global Compact might be one way of learning from other companies. 

If she needs answers more quickly, then a good first stop would be the SA8000 Social Accountability standard, one of the most respected certification systems out there for defining and auditing decent workplaces.

Finally, there is the question of cost. Ethical sourcing won’t break the bank, but Ms. Fitzpatrick could almost certainly find a manufacturer that would undercut a responsible supplier that takes employee rights seriously. But the question she already seems to be asking is – at what cost? She is marketing to a consumer group that is plugged-in, socially aware and keen to align their values with their purchasing.

Amy Roberts, director of sustainability, Mountain Equipment Co-operative, Vancouver

Ms. Fitzpatrick should look at the work that the Washington, D.C.-based Fair Labor Association has done.

Mountain Equipment Co-operative is a member, and the reason I would point her in that direction is that she’s selling into the collegiate system and they have designed the system for that. To sell to universities in the United States, you are required to be a member.

Members are pretty open about talking to other brands about who their suppliers are and who’s been good to work with. The FLA has some great tools, such as questionnaires for prospective suppliers, which would help her understand how they do business and exactly where everything is being made. She can ask who their other customers are. She should personally visit three to five suppliers before she picks one to see firsthand what conditions are like.

Any premium she ends up paying will be offset by the fact that the factories are well run. If a factory has a good social compliance program, we’ve found it means it is going to deliver on time, meet quality standards and be around in the future.

Zoe Mills, partner relations, Me to We Style, Toronto

Ms. Fitzpatrick should carefully research her potential suppliers. At Me to We Style – maker of T-shirts, leggings, tote bags, sweatpants and other apparel – we work with suppliers who have been carefully vetted and have the third-party certifications that align with our needs. For us, reducing our carbon footprint by producing things locally as much as possible is the best way to go.

We are certified by the Fair Labor Association. In terms of materials, we use 100-per-cent organic cotton, recycled polyester and viscose from bamboo. Our cotton is ethically sourced from India, Turkey and Pakistan and is certified by the Global Organic Textile Standard.

She could look at partnering with an organization that does good things for the planet. In our case, we plant a tree for every T-shirt sold, and we give half of our profits to Free the Children. She could consider donating to fundraising programs at the schools she sells to.

THREE THINGS THE COMPANY CAN DO NOW

Dig in

From the UN Global Compact to the SA8000 Social Accountability standards, there’s plenty of helpful information available.

Go to the source

Visit three to five suppliers before picking one, to see firsthand what conditions are like.

Give back

Consider partnering with an organization that does good things for the planet, and donate to fundraising programs at the schools she sells to.

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Interviews have been edited and condensed.

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