The 60 Million Figure in Production That You Probably Aren’t Thinking About — but Should Be

Jose Suarez, CEO and co-founder of Impactiva, knows that the footwear industry sells more than $400 billion in product a year and is growing at a rate of 3-4%. But he doesn’t want the industry to be focusing on that; he wants to look at the 60 million artisans who work in footwear production.

“The only way you will be able to compete in the future is do what Nike, Adidas, New Balance have done: own the relationship and have strategic partnerships with your workers and production,” said Suarez at the FN CEO Summit in Miami today.

While sustainability initiatives have been introduced by multiple brands and retailers, these projects commonly address materials and manufacturing emissions as opposed to the factory employees. At Impactiva, the company is placing emphasis on training the artisans so that the production process will have fewer defective products, decreased waste and increased capacity.

Suarez compared the commonly accepted number of errors on the manufacturing floor, which can account for 10% of product, to the reaction to a similar error rate if it happened in prescription fulfillment — it wouldn’t be tolerated. He spoke to the value of training employees at the factory level so as to cultivate a more engaged workforce, able to isolate and correct defects as they happen, and even contribute to greater innovation.

Sourcemap Screenshot of a woman looking at a supply chain map
Managing a supply chain involves more than just looking at the factories themselves; the workers who run them need to be addressed too, said Jose Suarez.
CREDIT: Sourcemap

“What if we as an industry truly activated and engaged the hearts and minds of the family of 60 million artisans, rather than only use their arms and legs?” asked Suarez.

Supply chain management and transparency is becoming a more popular topic; earlier in the day, Coach’s president and CEO Joshua Schulman announced its commitment to achieve 95% supply chain transparency. Throughout the summit, experts agreed that consumers are all pushing for more sustainability and social consciousness from the brands they support; Suarez believes that training the workforce is a way of achieving both.

Through better training, Impactiva’s case studies have shown that the employees on the production line manufacture quality goods with fewer errors, meaning more product can be approved for sale per hour of manufacturing. This reduces the amount of waste created by scrap product, improving sustainability metrics. It also increases revenue, some of which can be used to pay artisans a higher wage, thus improving ethical standards and employee retention.

“They really are artisans, but unfortunately, we’re not really treating them that way,” he said. “Through training, we turn every artisan into a guardian of quality.”

Watch the video below to see how fellow FN CEO Summit speaker Allbirds is winning e-commerce:

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