Monitoring compliance

We audit our suppliers to ensure they are complying with our Standards. Independent monitoring of our suppliers has also been carried out since 2000.

Strategic monitoring

Over the years our approach to monitoring our suppliers matured and has been permanently refined to include the lessons learnt from our supply chain compliance programme.

The monitoring approach we actually apply for our core supply chain is called ‘strategic monitoring’.

How strategic monitoring is different

Previously suppliers 'waited' for audits by SEA field staff that identified non-compliances before taking any remedial action. This reactive compliance model proved ineffective, leading to incremental or sometimes purely cosmetic changes in performance rather than sustainable compliance.

Strategic monitoring rigorously assesses compliance risks and identifies the root causes of non-compliance. Auditors do more preparatory work and then check performance against a risk list customised for each factory that is monitored.

As well as monitoring compliance performance, the new system evaluates the effectiveness of compliance systems and the work of their administrators. This in turn leads to a more precise evaluation of training needs and encourages suppliers to implement HSE and HR management systems.

This approach means deeper monitoring of fewer suppliers, where factories may be visited two or three times more often than previously.

For audit numbers, see the Audits and training page of our Performance data section.

Pre-approval of new suppliers

All potential new suppliers undergo an initial assessment carried out by the SEA team, and orders cannot be placed with a new supplier without SEA approval. By setting a high entry bar for potential and new suppliers, we avoid getting into business relationships with suppliers that have serious workplace issues and insufficient means of improving unacceptable conditions.

Links with the KPI

Both the initial assessment and monitoring approaches for active suppliers have been successfully linked to the KPI factory rating and the strategic compliance planning process. The latest version of the KPI, which measures the delivery and effectiveness in six compliance units, has been in full use since 2006.

Strategic compliance planning is used with selected core suppliers. While neither tool replaces the monitoring process, they have been designed as management benchmarks to track overall factory compliance performance and to inform decisions about investment activities.