Product design and procurement specialist Matrix APA is tackling supply chain issues to steer significant change in a notoriously challenging field.
What the judges thought
- Matrix APA has a clear commitment to challenging the status quo.
- The company's business structure is led by CSR, which is in turn their unique selling point.
- This provides a model that can be replicated throughout the market.
Social and business impacts
- Suppliers reduced working hours and increased benefits for workers: 66% of factories have increased their rest days from two days to four per month and 54% of the factories’ wages increased over and above local minimum wage standards.
- Suppliers increased their productivity and efficiency, with capacity increased up to 22% through streamlined operations and upskilling of workers, and a 26% reduction in material waste and rejected goods.
- Matrix gave back to the community, donating over 50 gift boxes to charities in the UK, Hong Kong and China; reinvesting $12,000 on improving working conditions; and providing work placement opportunities for underprivileged people in the UK.
- Streamlining manufacturing operations and improving efficiencies achieved a 12 % increase in on-time deliveries, 6% more orders on budget and an 80% reduction in quality complaints.
- Matrix achieved economies of scale by working with fewer, like-minded suppliers, increasing profit margins by 10% and turnover by £3.5 million since 2012.
- The business gained a credible reputation as a social and ethical leader in the industry, winning a European Supply Chain Excellence Award for its work in sourcing and procurement. Matrix attracted five new clients in 2014 on the basis of its ethics.
Matrix APA sources goods from suppliers in the Far East through offices in London, Hong Kong and China. It works closely to address challenges within supplier factories such as long working hours, substandard health and safety practices, and environmental compliance.
Matrix sends a dedicated team of experts to visit factories every six to eight weeks, building relationships with workers and supervisors, winning trust and implementing changes which have seen
worker hours reduce, and their wages and productivity increase.
By going beyond box ticking, Matrix has also won recognition for supply chain excellence, attracting new business and increasing its profit margins.
The story in detail
“ A small business transforming the approach to ethical sourcing in the global supply chain, living and sharing these values which have now become their unique selling point. ”
Going beyond compliance
Most businesses in this sector rely on a “box ticking” audit approach to social and ethical compliance within the supply chain. Because this depends on third party factory audits, it carries major risks. Instead, Matrix advocates transparency in the supply chain as a fundamental starting point.
Matrix believed that the only way to create lasting change was to engage with the supply chain to support the local community, help them develop new skills and mindsets, and support them in taking ownership of change.
Its initiatives focused on the most common labour standards and non-compliances, including long working hours, pay below the minimum wage, low retention and benefits, poor worker-management communication, sub-standard health and safety practices, low productivity and inefficient operations.
Building engagement with suppliers
Matrix developed a social and ethical programme that demonstrated new ways of working in its industry.
It built relationships with suppliers in order to win trust and gain 100% transparency in the supply chain. Regular factory visits and project work focused on improving processes to minimise risk, increase profit and, most importantly, respect the human rights of the workforce. The environment is not commonly a priority for Matrix’s China suppliers so the company provided training workshops to educate them on the importance of environmental compliance.
An experienced team, led by the Head of CSR, worked directly with suppliers on ethical development programmes and specialist projects in the Far East. The compliance team visited suppliers’ factories every six to eight weeks, building relationships and trust. This ensured effective two-way communication, not only with factory owners, but with supervisors and the workers themselves.
Matrix APA wants these changes to go industry-wide, and works with clients, within SEDEX (Supplier Ethical Data Exchange), and with the Ethical Trading Initiative to develop new ways of working and to advocate for change.
The company engages all employees in its ethical approach through job swaps and regular trips abroad. At home, its community involvement includes providing work placements for prisoners, and a day release scheme for Matrix APA staff for their chosen volunteer projects.
What Matrix APA's Founder and CEO said:
“I strongly believe in the philosophy ‘You get what you give’ and have worked hard to embed these values deep within our organisation since I started the company 18 years ago.
"Our social and ethical approach is built around a solid commercial framework, so that it not only hugely benefits the people that really make our company special, including the ‘often forgotten’ in our supply chain, but also delivers a significant positive impact to our business stakeholders. I am extremely proud of everything we have achieved in the last two years, and look forward to celebrating more valuable successes in 2015 and beyond.” - Charlie Bradshaw