Photo: A woman stitches a local design onto a sari at the Ayesha Abed foundation, Manikganj
Lessons on Inclusive Supply Chains and Achieving Scale
How does one measure the success of a business today? Is it commercial viability or the ecosystem it creates to promote sustainable development through stronger market linkages and supporting the most marginalised? Or can it be both? In a world when double and triple bottom lines are increasingly de rigueur, we now look at inclusive supply chains as a way to determine how we choose to do good, while doing well.
As one of Bangladesh’s largest retailers of clothing and homewares and one of BRAC’s 16 social enterprises, Aarong has built a brand that is now earning annual revenues of roughly USD 60 million with 98 per cent of its client base in Bangladesh. Yet it’s true contribution to Bangladesh lies in the inclusivity of its supply chain with regards to demography, craft and geography.
Initially created 35 years ago as a means for providing marginalised, rural artisans, especially women with livelihoods at fair prices, Aarong, which means ‘village fair’, sought not only to provide a platform for the indigenous crafts produced by these women but to bring about a social revolution to make local handicrafts fashionable on a national scale. But how does one scale an operation like this sustainably?
Through a combination of design innovation in line with urban tastes, instant payments for its artisans, capacity building, access to credit and strong marketing and retailing, Aarong has managed to build retail outlets around the country with a decentralised model of 65,000 workers, 85% of them women. Aarong has collaborated with the Ayesha Abed Foundation (AAF) that serves as a facilitator to gather and train local women from Village Organisations in order for them to work at one of Aarong’s 13 production centres.
30,000 of the artisans are home based workers and 800 are independent producers from all corners of the country, entrepreneurs in their own right who conduct fair trade with Aarong. Entrepreneurs are encouraged to organize other artisans from their communities, including those that BRAC’s services have not yet reached. Additionally, more than 35,000 other artisans are working at centres created by AAF, producing and selling goods to Aarong to support themselves and their families, resulting in a total of over 320,000 direct and indirect beneficiaries. Aarong artisans are inclusive in both background and skill set – indigenous, rural and ultra-poor artisans bring a multitude of local skills to the table.
It is crucial for workers to have an enabling environment and for livelihoods to be sustainable; there needs to be linkages to social services that provide holistic support. Through its collaboration with the AAF and BRAC, Aarong is able to offer social interventions to their staff - such as health security, skills training, childcare/education and legal advice in addition to microfinance loans.
Aarong has collaborated with several partners over the years to provide additional development support to producer groups through livelihood development, managerial training and skills development, for example KatAlyst offer capacity building for producer groups. At the AAF, in addition to providing training for the women, workers benefit from a living wage and job security. The workspaces are often right at their doorsteps, to enable them to mainly work from home while being able to look after their families. There is a strong focus on environment, gender-specific needs, safety, security and most importantly - the empowerment of women.
Requests to replicate the Aarong model are now being made from other countries we operate in; both Afghanistan and Pakistan have thriving cottage industries and scores of artisans with distinct craftsmanship who need a platform that provides secure working conditions, cohesion and linkages to both local and global markets.
With the Sustainable Development Goals around the corner and looking to focus on inclusive growth, jobs and enterprise, defining success may well be impact at scale that goes beyond income and places power at the doorstep of the most marginalised workers, taking into account the specific needs of employees both in the workspace and beyond.