Best Practices for Managing Ethical Sourcing & Vendor ... · Best Practices for Managing Ethical...

Best Practices for Managing Ethical Sourcing & Vendor Compliance

Roger Mayerson Director of Business Solutions for NGC

NGC Confidential 2013©

My Experience…

20 years Apparel Manufacturing and Textile experience in Industrial Engineering, Plant Management and Executive positions.

13 years Retail Product Development, Sourcing, Quality/Compliance Executive positions

3 ½ years Software Business Services developing software to address the needs of the industry


Challenges…


Evaluating Vendors is becoming more complex

Worker & Factory Safety remains a critical Issue for the industry

Making Ethical Sourcing decisions continues to be a challenge

Fashion Supply Chains are under intense scrutiny

Concerns after recent factory tragedies have emphasized the

need for more transparency

Bringing unwelcome publicity to Brands & Retailers

Managing Ethical Sourcing & Vendor Compliance

It’s Not Just About Cutting & Sewing


Facilities with safe and healthy conditions Worker’s Health Worker’s Safety Workers free from forced or compulsory labor Workers free from physical or mental punishment Workers free from discrimination Minimum Wage Minimum Age Maximum Hours Fire Safety First Aid Clear Aisles Working Conditions Environmental Conditions U.S. and European Regulatory Requirements U.S. and European Environmental Requirements

Today’s Factories have to comply with a myriad of requirements by:

Agent

Vendor

Buyer

And Then There’s The US Gov.

Consumer Products Safety Improvement Act (CPSIA)

California Transparency in Supply Chains Act (SB657)

The Maine Toxic Chemicals in Children’s Products Law

The Washington Children’s Safe Product Act

C-TPAT (Customs Trade Partnership Against Terrorism)

Dodd-Frank Wall Street Reform and Consumer Protection Act

(DRC Conflict Minerals)

Proposition 65


And Then There’s Us…


Why does a Factory who ostensibly is in business to make money with a significant investment at risk - not comply with your requirements?

Vendor’s Culpability Buyer’s Culpability

Management shortcomings Over booking the Vendor

Lack of Ownership involvement Downward Pressure on Prices

Cultural Differences Increased Quality Demands

Price pressures Shorter lead-time pressures

Short term vision “Last minute” Order Changes

Lack of funding Cancellations

Corporate Culture Corporate Culture

So How to Proceed?


Get a Good Dog!


The Working Retrievers: The Training, Care, and Handling of Retrievers for Hunting and Field Trials by Tom Quinn

Confronting Challenges


EVALUATE MANAGE

REPORT

EVALUATE


Social Compliance

Manufacturing Capabilities

Manufacturing Capacity

Full transparency on the use of subcontractors

Regulatory Compliance

As well as the traditional metrics of price, quality, delivery record and compatibility with your corporate culture

Evaluating vendors has become much more complex. Vendors must now be evaluated on a complex matrix of factors that include:

MANAGE

Managing the:

The requirements from many SOVEs from different Customers

The requirements from conflicting cities/provinces/countries for Minimum Age, Minimum Wage, Maximum hours worked

The many CSR, CTPAT, Environmental, Quality Audit work flows for different Customers, 3rd parties & NGOs

Corrective Action Plans for those Audits


REPORT


You must build a solid foundation: Access & retrieval for all stakeholders

in the product development, sourcing & logistics cycle

Incorporate a supplier portal to facilitate information-gathering and to ensure transparency & partner confidence

Reporting should be: Real-time

Customer specific

Easy to access

With strong security at the company, role & individual user level

An Integrated Compliance System

Integrated Compliance

System

Vendor Compliance

Product Compliance


Environmental Compliance

Vendor Compliance


Agent/Vendor/Factory Profiles

• Each supplier's capabilities

• Current Certifications

• Compliance and quality score carding

Capacity Planning

• Reduce Subcontracting

Proactive calendars

• Alert you to upcoming audits,

• Re-audits

• Certification dates,

• CAPs

.

Exception Dashboards

• Allows for alerts to be sent to your dashboard and emails auto sent to alert all parties when an event is late or due

Collaborative communications

• Tied to specific events,

• Audits

• Styles

• Purchase Orders

User Configurable report carding

• Shows on time %,

• Number of CAPs

• Time to compliance

• Pass/fail %

Key Performance Indicator Dashboard

• By Vendor

• Factory,

• Program,

• Compliance Category

Document Management

• Standards Of Vendor Engagement are housed & available on

• Reports, Audits & Communication

Visibility in to the whole process

• Web Based

• Mobility

• Dashboards

• Exception driven

Product Compliance


Integrated

• A comprehensive testing and quality module that is integrated to your supply chain

Manage Testing Process

• The ability to issue test requests, manage the testing process, issue alerts when there are failures or tests not completed on time

Visibility

• The ability to have visibility into the timeline of testing by all parties

Collaboration

• The ability to have collaborative communications with all parties involved including the vendor, 3rd party testing labs, and your internal team

• All communications permanently tied to the style, PO, test report # for historical analysis

Report Card

Scores the factories adherence to:

• Pass/Fail %

• Regulatory Required tests vs. performance tests results

• Tests not performed on time

• Number of Retests



One Truth • Consolidate information

about product testing and factory compliance from multiple systems into a single source

3rd Party Collaboration • Collaborate with external

parties (suppliers and 3rd party testing companies) for test execution and monitoring

Improve communication • Streamline communications

throughout all processes

Comprehensive Reporting

• Generate reports to monitor the processes, demonstrate due diligence and traceability

• User configurable reports

Business Intelligence Dashboard

• Providing real-time data management and decision support to ensure that senior management receive accurate information on causes, financial impact, and mitigating actions to control risk

Environmental Compliance


The Sustainable Apparel Coalition is an industry-wide group of more than 80 apparel and footwear brands, retailers, suppliers, nonprofits and NGOs committed to reducing the environmental and social impacts of apparel and footwear products around the world

The coalition’s main focus is the Higg Index, a tool that measures the environmental performance of apparel products using three models of sustainability:

Brand, Product and Facility

A PLM system should be able to house and track the Higg Index score for your factories and products

Benefits of an Integrated System

Consolidate information about product testing and factory compliance from multiple systems into a single source

Collaborate with external parties (suppliers and 3rd party testing companies) for test execution and monitoring

Streamline communications throughout all processes

Generate reports to monitor the processes, demonstrate due diligence and traceability


Benefits of an Integrated System

Provide real-time data management and decision support to ensure that senior management receive accurate information on causes, financial impact, and mitigating actions to control risk – ONE TRUTH

Enforce control and Accountability for all suppliers/vendors and team players involved in the design, manufacture and delivery of the product

By ensuring compliance using PLM, retail and apparel companies can avoid costly litigation, reduce downstream risks and costs of non-compliance, and win market share by building and maintaining a positive public image


Thank You

Supply Chain Transparency, Vendor Compliance and Factory Safety: What You Need to Know White Paper

Roger Mayerson

[email protected]


Thank You

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