From: Stanford News Service
Published June 11, 2008 09:28 AM

Gap executive urges global manufacturing standards

When clothing giant Gap took its first steps toward corporate responsibility in 1992, it wasn't aiming for anything extraordinary, said Dan Henkle, senior vice president of social responsibility at the San Francisco-based company.

"We were talking about: You must pay the minimum wage, you must pay overtime premiums, you must not have people work more than 60 hours a week—pretty basic things," Henkle told business and academic leaders attending the conference "Socially and Environmentally Responsible Supply Chains" a few weeks ago.

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Eventually, Henkle said, Gap wants to achieve a level where social responsibility "is just how we get things done, instead of it being something special."

Gap has made progress toward that goal, releasing its third Corporate Responsibility Report last year. But the way has not been easy. Henkle outlined Gap's programs during the conference, which was sponsored by the Global Supply Chain Management Forum at the Business School.

Henkle oversees Gap's factory monitoring, community investment and environmental affairs efforts.

One major challenge, Henkle said, is that while production now takes place globally, there is not a global regulatory system to set and enforce rules for companies to follow. Gap monitors 2,000 garment factories in 50 countries and conducts about 4,000 inspections annually. But a lack of standards means duplication. One factory that makes items for Gap and other companies underwent 98 performance audits in one year. "It's absolutely absurd," said Henkle. "I think there needs to be a leveraging of strengths across these organizations."

Gap rates its factories and is looking to shift more production to the facilities rated as top performers to encourage more suppliers to operate responsibly.

There is also another incentive to use high-performing firms. Company officials noticed low-performing factories often had delivery problems and poor-quality issues. Said Henkle: "I do believe that if you are doing social responsibility well, you're probably doing a lot of things well."

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