Audits and training

Number of factory audits/visits and trainings

During 2008, 1,323 factory visits involving management and worker interviews, document review, facility inspections and trainings were conducted at different levels in our supply chain. The SEA team conducted 251 training sessions and workshops for suppliers, licensees, workers and adidas Group employees.

  2008 2007 2006 20052
Visits (incl. Audits)1 1,323 1,007 1,101 916
Trainings 251 267 173 225
1) Including multiple audits/visits in the same factory conducted by the adidas Group SEA team and external monitors, but excluding FLA audits. Including audits in licensee factories; visits involving management and worker interviews, document review, facility inspections and trainings on-site.
2) Figures for 2005 do not include the Reebok business.

Number of training sessions divided by region and type1

In 2008, we continued our intensive efforts to provide training for our suppliers as well as for the SEA team, licensees and employees of the adidas Group.

To build capacity in our supply chain and within the adidas Group, the SEA team conducted 251 training sessions for more than 2,470 participants. Included in this number are 81 group training session.

Type and number of training

Region Fundamental2 Performance3 Sustainability4 Total
  2008 2007 2008 2007 2008 2007 20085 20076
Asia 80 98 68 58 11 34 159 190
Americas 51 35 11 1 4 6 66 42
EMEA 24 24 0 2 2 9 26 35
Total 155 157 79 61 17 49 2517 2678
1) Trainings conducted for suppliers, workers, licensees, agents and adidas Group employees.
2) Fundamental training covers: Workplace Standards & SEA introduction; FFC training; SEA policies & SOPs.
3) Performance training covers: Specific labour, health, safety and environmental issues.
4) Sustainability training covers: Sustainable compliance guideline & KPI improvement; Factory Self-Audits (factory internal audits).
5) In 2008, more than 2,470 people participated in these trainings.
6) In 2007, more than 3,500 people participated in these trainings.
7) Including 81 group training sessions, i.e. trainings with participation of more than one supplier.
8) Including 123 group training sessions, i.e. trainings with participation of more than one supplier.

Number of audits divided by region and type

In 2008, the SEA team conducted 1,261 audits (including external monitoring audits). In addition to these audits, the SEA team visited suppliers' sites several times to meet with factory management and discuss specific issues, to follow up project work or conduct training sessions.

Completing a high volume of initial assessments remained a challenge for the SEA team in 2008, particularly in Asia. There were a total of 626 Initial Assessments, resulting in 19% of candidate factories rejected.

Performance audits are only recorded as such since the beginning of 2008, so that no comparable data is available for this audit type. All audits were collected as Initial Assessment or Sustainability Assessment in 2007.

Audits conducted by external monitors in 2008 were commissioned by adidas Group entities, including licensees with indirect sourcing models.

Initial Assessment1

Region SEA Team External Monitors Total
  2008 2007 2008 2007 2008 2007
Asia 207 205 308 147 515 352
Americas 60 38 10 10 70 48
EMEA 9 13 32 28 41 41
Total 276 256 350 185 626 441

Performance Audit

Region SEA Team External Monitors Total
  2008 2007 2008 2007 2008 2007
Asia 461 - 35 - 496 -
Americas 65 - - - 65 -
EMEA 13 - 15 - 28 -
Total 539 - 50 - 589 -

Sustainability Assessment2

Region SEA Team External Monitors Total
  2008 2007 2008 2007 2008 2007
Asia 39 240 - 2 39 242
Americas 6 13 - - 6 13
EMEA 1 28 - 4 1 32
Total 46 281 0 6 46 287

Total

Region SEA Team External Monitors Total
  2008 2007 2008 2007 2008 2007
Asia 707 445 343 149 1,050 594
Americas 131 51 10 10 141 61
EMEA 23 41 47 32 70 73
Total 861 537 400 191 1,2613 728
1) Every new supplier factory has to pass an Initial Assessment to prove compliance with the Workplace Standards prior to order placement.
2) Audits conducted in approved supplier factories.
3) Including 181 audits conducted in licensee factories by external monitors and the SEA team.

Number of audits conducted in licensee factories by external monitors and the SEA team divided by region and type in 20081

Initial Assessment2

Region External Monitors SEA Team Total
Asia 98 8 106
Americas 4 9 13
EMEA 3 0 3
Total 105 17 122

Performance Audit

Region External Monitors SEA Team Total
Asia 16 28 44
Americas 0 2 2
EMEA 6 0 6
Total 22 30 52

Sustainability Assessment3

Region External Monitors SEA Team Total
Asia 2 5 7
Americas 0 0 0
EMEA 0 0 0
Total 2 5 7

Total

Region External Monitors SEA Team Total
Asia 116 41 157
Americas 4 11 15
EMEA 9 0 9
Total 129 52 181
1) This might include factories which produce both for the adidas Group directly as well as for licensees/agents.
2) Every new supplier factory has to pass an Initial Assessment to prove compliance with the Workplace Standards prior to order placement.
3) Audits conducted in approved supplier factories.

KPI Assessment and C-Rating

The table on the left side shows the average audit score by unit of measure for those active core suppliers that were rated against the six units of measure in the KPI to date. The right hand overview indicates the percentage of factories per C-Rating.

KPI Unit of Measure 2008 2007   C-Rating % of factories
Management commitment and responsiveness 40.12 64   0-C 0.75%
Management systems 48.74 45   1-C 7.52%
Worker-management communication and industrial relations 65.44 64   2-C 54.51%
Compliance training for workers and management 58.80 55   3-C 28.57%
Transparency in communication and reporting 71.79 74   4-C 8.65%
Compliance performance 59.04 60   5-C 0%
KPI Cumulative Score 47.79 -   Total 100%

Independent FLA Audits1

Since joining the FLA in 1999, more than 220 Independent External Monitoring (IEM) audits and verification visits have been conducted at adidas Group suppliers. In 2008, FLA activities included 4 independent external monitoring visits to factories in Bangladesh, China, Egypt and Indonesia. 4 factories in China and Thailand participated in FLA 3.0 exercises and 3 factories received external verification visits. 8 factories participated in 3 FLA special projects in Asia, EMEA and Central America. These so-called redirected audits are FLA Participating Company engagements in specific project work that addresses resolution of chronic compliance issues in the global workplace. Re-directs are substituted for independent external monitoring visits to factories. This substitution option is only available to FLA accredited programmes. The term derives from the 're-direction' of IEM fees to financially support specific project work by the FLA to address chronic compliance issues.

FLA Year Period No. of audits
4th2 Jan - Dec 2005 30
5th Jan - Dec 2006 43
6th Jan - Dec 2007 15
7th Jan - Dec 2008 19
1) Including Independent External Verification audits and redirected audits.
2) Including audits conducted for Reebok before it was acquired by the adidas Group in 2006.

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