Analysis of the latest JCPenny factory audit trends

JCPenney was founded in 1902 and has 1,200 large clothing stores across the United States. Its sales in 1998 reached US$38 billion (equivalent to RMB 320 billion, exceeding the total clothing sales of RMB 290 billion in China in 1998). In order to reduce transaction costs, the company is considering increasing the proportion of direct purchases and is particularly interested in finding a production base in China.

Analysis of the latest JCPenny factory audit trends

As an American fashion brand, JCPenny has not used a third party (such as Intertek, BV, SGS, UL, etc.) as an auditing agency for a long time. However, starting this year, JCPenny found that self-audits could not meet its requirements and began to look for external partners. The original JCPenny audit covered three aspects (social responsibility, quality assurance, and anti-terrorism requirements), but the recently launched BV JCPenny audit focuses on social responsibility. As the only designated partner of JCPenny so far, BV has set very strict requirements for its social responsibility audits, resulting in no green-rated suppliers in the mainland, and even very few yellow-rated suppliers. As a result, JCPenny has to start relaxing certain requirements. For example, orange projects that do not involve certain issues can accept rectification plans to ensure that business can proceed normally.

In fact, as a byproduct of trade, social responsibility audit must be attached to the existence of trade. If it affects trade itself, then those large commercial organizations will have to find a new way out. At the beginning, Wal-Mart, the world's largest retail organization, once reached a global comprehensive cooperation with Intertek, which increased Intertek's social responsibility audit business by 300% in one year. But later many problems were found, sometimes even affecting Wal-Mart's own development. Finally, Wal-Mart had to find some competitors for Intertek to ensure its own interests. BV's current audit methods and rating standards have actually affected the interests of some of its customers. Some factories are overwhelmed and began to complain and question. There are also voices within JCPenny seeking other audit agencies. So far, it is said that it has contacted Intertek. Social responsibility audits are becoming more and more stringent, and some factories are beginning to fall behind and have big problems.

In addition, facing increasingly strict social responsibility audits, some factories are beginning to fall behind and are experiencing major problems. In this regard, we cannot help but ask: What is the future of factories? Will they have to undergo another large-scale relocation?