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Online orders will continue to ship as normal.  AKL stores are temporarily closed, all other stores are open.  UPDATE – Our Warehouse is still fully operational. Online orders will continue to ship as normal. AKL stores are temporarily closed, all other stores are open.

Supplier Performance

SUPPLIER PERFORMANCE.

  • AUDITING & SOCIAL IMPROVEMENT PROGRAMME

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Supplier monitoring plays an important role in creating and maintaining a transparent supply chain. Social compliance audits are extremely useful in gaining a high-level understanding of whether a supplier is operating safely and treating workers with respect and dignity. However, having audited our suppliers for several years, we believe that the most important thing is not the result of an audit, but the continual improvement of a supplier, and a mutual desire for meaningful change.

In 2018 we began a partnership with the Amfori Business Social Compliance Initiative (Amfori BSCI). Amfori’s philosophy and practices closely align with our principles, supporting us to implement our ethical monitoring strategy. Their holistic approach to human rights issues and environmental sustainability enabled us to build on the work we had already started, as well as offering greater learning opportunities for both our company and our suppliers. Through significant exposure to high-quality education, best practices, and increased local knowledge and guidance, we’re able to achieve better solutions for all.

We believe that a collaborative approach to supplier relations is needed to increase our leverage with suppliers, as well as to tackle the more complex issues that most brands struggle to resolve on their own. Our partnership with Amfori provides a great platform in which collaboration can take place, allowing us to share activity results with other companies to reduce audit fatigue and duplication.

 

13 AREAS ASSESSED IN THE AMFORI BSCI AUDIT:

 

1. Social Management System and Cascade Effect (7 assessment questions)

2. Workers Involvement and Protection (5 assessment questions)

3. The Rights of Freedom of Association and Collective Bargaining (4 assessment questions)

4. No Discrimination (3 assessment questions)

5. Fair Remuneration (6 assessment questions)

6. Decent Working Hours (4 assessment questions)

7. Occupational Health and Safety (OHS) (25 assessment questions)

8. No Child Labour (4 assessment questions)

9. Special Protection for Young Workers (6 assessment questions)

10. No Precarious Employment (4 assessment questions)

11. No Bonded Labour (4 assessment questions)

12. Protection of the Environments (5 assessment questions)

13. Ethical Business Behaviour (4 assessment questions)

 

 

OUR SUPPLIER PERFORMANCE.

 

The overall rating of a BSCI audit reflects the extent to which the factory has integrated the BSCI Code of Conduct into its daily business culture and operations. It is not calculated by the auditor but generated automatically by the BSCI IT system based on the combination of ratings across the 13 Performance Areas (PAs). Auditors don’t know the final rating until they have submitted their audit to the Amfori BSCI platform. This means at the audit’s closing meeting the auditor focuses on the good practices and the findings but does not present a rating. BSCI also emphasises that when the supplier is finally given a rating, this is intended to be more of a guide, and a roadmap for improvement, rather than a strict indication of the factory’s overall performance.

 

FINAL RATING RANGES FROM A to E:

 

A to B being a very good / good level of maturity that allows the factory to maintain its continuous improvement process without a professional follow-up audit.

 

C to E being acceptable/ insufficient or unacceptable level of maturity which requires the factory to develop a related remediation plan within 60 days of the audit date. A professional follow-up audit is envisaged to assess continuous improvement.

 

The Amfori BSCI audit cycle is a two-year period for producers that obtain an A or B rating. For producers that receive an overall grade of ‘C’, ‘D’, or ‘E’, a follow-up audit, which will address not all PAs but only those with findings, is required between 2 and 12 months after another audit. They then return to the 2-year cycle from the date of the initial audit. Further information is available on the Amfori site here.

 

OUR SUPPLIER PERFORMANCE:

 

The average rating of our factories is a C rating, which is defined as an acceptable level of maturity. This means the majority of our suppliers are on a 12-month audit cycle. 

Below is an overview of the types of issues we found with our suppliers during their last audit cycles: 

  – No issue = 26%

  – Minor issue = 69%

  – Major issue = 5%

  – Critical issue = 0%

During these audits, most suppliers scored A ratings for the below PAs:

  •   – PA 3: The Rights of Freedom of Association and Collective Bargaining 
  •   – PA 5: Fair Remuneration
  •   – PA 8: No Child Labour
  •   – PA 9: Special Protection for Young Workers
  •   – PA 10: No Precarious Employment
  •   – PA 11: No Bonded Labour
  •   – PA 12: Protection of the Environment
  •   – PA 13: Ethical Business Behaviour

 

Despite most suppliers scoring A ratings across the majority of the PAs, unfortunately, there are a few major PAs that often pull down the average. These are:

SOCIAL MANAGEMENT SYSTEM AND CASCADE EFFECT:

The purpose of this area is to assess the effectiveness and coherency of the supplier’s management system. An effective management system is crucial to ensure that social performance is integrated into the business model. With a management system in place, the auditee can take ownership over the process and continuously improve its business practices towards greater protection of the workforce.

During their most recent audit: 
– 32% of our suppliers scored a B rating
 
– 16% of our suppliers scored a C rating
 
– 52% of our suppliers scored a D rating

 

These scores indicate to us that a lot more work needs to be done in this area. We’ve identified three focus areas to help us lift standards and empower our suppliers to create more effective social management systems:

                                • – Encourage suppliers to appoint a senior manager to ensure the Amfori BSCI values and principles are followed and implemented effectively.

                                • – Request suppliers to work with their significant business partners to ensure they understand the BSCI Code of Conduct and adhere to its standards.

                                • – Ask suppliers to develop policies and strategies to mitigate potential labour rights risks, as listed in the BSCI Code of Conduct. Ensure these are reviewed regularly.

DECENT WORKING HOURS:

Excessive working hours are recurrent in the clothing and textile industry, where companies sourcing from their business partners may often demand that the products are produced within a short time frame, causing workers to work overtime to complete their work. At AS Colour, we try and mitigate this risk as much as possible by capacity planning, in collaboration with our factories, and providing long lead times to ensure workers have plenty of time to complete our orders. However, due to our production only making up a tiny percentage of our factories’ overall production, suppliers must have robust systems in place to ensure workers aren’t subjected to excessive overtime as a result of other brands overloading them.

    • During their most recent audit:
        •   – 43% of our suppliers scored an A rating
        •   – 57% of our suppliers scored a D rating

These polarising results indicate to us that while many of our suppliers are excellent at ensuring working hours are decent, the majority of our suppliers are struggling in this area. 

We’ve identified three focus areas for us to work on with our suppliers, to help them manage working hours better and more fairly, and therefore support and respect workers more effectively:

  • – Ensure all suppliers clearly understand the BSCI working hour regulations, as per their signed Code of Conduct.

  • – Discuss excessive overtime issues with suppliers regularly, identifying the root cause of any issues, and creating a Strategy for improvement.

  • – Request that all workers be given regular Amfori BSCI training on decent working hours. Ask factories to provide a log of this training, detailing the module covered, when training took place, and who attended.

 

  • OCCUPATIONAL HEALTH & SAFTEY:
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  • Protecting the health and safety of workers is an extremely important part of ethical manufacturing. However, unfortunately keeping workers physically safe isn’t always prioritised by suppliers or companies in the apparel industry. Because of this, monitoring occupational health and safety is extremely important, which is why Amfori BSCI auditors conduct a rigorous assessment of this during audits. This includes checking:

    • – Level of observance with the laws and regulations applicable for the business activity or industry
    • – Capacity to detect, assess, avoid and respond to potential threats to workers’ health and safety
    • – Degree of active cooperation with workers (and/or their representatives) when developing and implementing systems towards ensuring occupational health and safety (e.g. by setting up an occupational health and safety committee)
    • – Capacity to protect workers in case of accidents including through compulsory insurance schemes information and capacity building of members of a producer organisation to prevent threats to the health and safety of members and their workers

     

    • During their most recent audit:
      •   – 84% of our suppliers scored an A rating
      •   – 16% of our suppliers scored a D rating

    While the large majority of suppliers scored well in this area, we want to make sure all suppliers prioritise worker health and safety, which is why this PA continues to be a big focus of improvement for us.

     

    We’ve identified three focus areas for us to work on with our suppliers, to help them to create and maintain a safe work environment through robust systems and effective training:

    • – Ensure all suppliers clearly understand health and safety requirements under the BSCI Code of Conduct
      – Request suppliers to complete a risk assessment, identifying risks specific to their factory and detailing their strategy to mitigate these risks.
    • – Request that all workers be given regular Amfori BSCI training on health and safety. Ask factories to provide a log of this training, detailing the module covered, when training took place, and who attended.

Click here to view our Ethical Production Guide.