It’s software for a hard problem.
Now in private beta, a new platform called FRDM from San Francisco-based nonprofit Made in a Free World has launched a digital risk analysis tool for companies seeking a better understanding of their supply chain’s social impact.
Founder Justin Dillon, a musician and filmmaker behind the antihuman trafficking and slavery documentary “Call+Response,” said: “We’ve created a level of intelligence with the FRDM tool that, no matter what type of product you have, we can give you some intelligence on where slavery or extreme forms of child labor might be somewhere in the supply chain.”
One early tester of FRDM, which stands for Forced-labor Risk Determination & Mitigation, is actress and model Amber Valletta, who reports using the platform to assess suppliers associated with her brand Master & Muse and the ethically sourced apparel and accessories collection sold under that name on Yoox.com.
“Ultimately, I think we need to be responsible business owners, and I think this tool is a great start,” said Valletta, whose company does not directly manufacture its own goods.
The software works by analyzing companies’ procurement and spend data to identify risk and global “hotspots” for human slavery and forced child labor. Results appear in a digital dashboard and rely on data from the research of products, geographical locations, raw materials, documented trade flows for goods, and global mining and agriculture practices collected into a database over three years. The tool, which Dillon and a team that includes former auditors are offering for use free of charge to companies on a case-by-case basis, is the business-to-business evolution of the nonprofit’s earlier, consumer-facing Slavery Footprint project, released in 2011, and its ongoing community-based field projects in India and Ghana.
The hope at this stage, from Dillon’s side, is for businesses and their procurement teams to have as much information as possible about the potential for human rights abuses when making decisions about the suppliers they use. By digitizing the risk analysis, Made in a Free World aims to make the process of homing in on suppliers and materials sources that may require further investigation, social audits or contract reviews faster and more efficient. The onus is on the companies and their employees to act on any information surfaced by the FRDM tool.
“We’re saying, based on the data and the profiles, this is an area that you need to look into,” Dillon said.
Human rights and supply chains have a notoriously complex, nuanced relationship, one with few easy solutions. Surfacing possible risks for workers, experts say, is just the beginning.
“Part of the challenge is that it’s very difficult to change or understand what’s happening in a supplier factory overseas. You can audit them, but what you don’t see is the stuff that isn’t obvious,” said Robert Handfield, Bank of America professor of supply chain management at North Carolina State University’s College of Management.
Economic realities are also a hurdle.
“The fact is that people pay with their pocket books, and the fact is, are people really going to pay more for a T-shirt that’s made in safe working conditions?” Handfield asked.
It’s common for factories to know they’ll be audited in advance, according to Handfield, who believes real change requires not only inquiry from businesses to their suppliers, but in-person site visits, relationships with local community members who can help provide insight into cultures and working conditions and, ideally, broad-based cooperation among the numerous players involved.
Further complicating what’s already convoluted, manufacturers’ subcontracts can, purposefully or not, create opaque supply chains for the materials used to make consumer products — the mica mined for cosmetics or the zippers on clothing, for example.
“It won’t be the entire handbag. It’s going to be something that’s in the handbag,” said Valletta.
Handfield echoed this, saying, “What you find is that there’s no way of knowing exactly who you’re buying from,” he said.
The Sisyphean nature of the task has not derailed policy makers from taking interest. Last June, U.S. Secretary of State John Kerry unveiled a public-private partnership between the U.S. State Department and Made in a Free World to help develop the FRDM tool.
In its current state, the resulting software is an assessment tool only, one that Made in a Free World’s team work closely with businesses to implement. Dillon acknowledged that the tool is just a start and envisions a future where any company, anywhere, could use an automated version and receive a dashboard of meaningful results to influence supplier decisions, both at the first-tier factory level and deeper into the practices of suppliers of source materials to those factories.
He bristles at what he described as a tendency for business leaders to jump to “impossible island,” where further investigation into the social practices of manufacturing and supply partners is blocked because of assumptions about increased costs, contract loyalty and other factors.
“I think we’re at an inflection point where there’s an incredible amount of enthusiasm and talk around this, but everyone is afraid of starting with something because it’s not perfect. We’re not afraid of not being perfect at all. It’s all about learning and moving forward as we go,” he said.