Managing our suppliers
Beginning with the foundation of our programme - our Workplace Standards - these are the steps we go through to manage our supply chain and improve workplace and environmental conditions:
Improving worker-management relations
In 2010, we continued to improve the management of relationships with workers and employers. We participated in two mature activities with workers and employers in our direct and indirect supply chains. Workers from 400 Chinese factories have access to confidential reporting channels and the outcomes of the hotlines are encouraging. Fifteen more factories joined the management training initiative to learn about Human Resources Management Systems (HRMS), bringing the three-year total to 75 factories in China and Vietnam. Please see the interview and case study for more information about Worker Hotlines and the HRMS project.
There are other key projects that looked at worker-management relations and trade union relations in particular, including developing a freedom of association protocol in Indonesia. We also funded the ILO translation of industrial relations guidance material in Vietnam.
Clustering our supply chain
Another highlight from 2010 was an improvement in how we monitor supply chain compliance by customising programmatic activities with three new (and redefined) clusters of the supply chain. These clusters stressed more value-added practices by the fair, good and best compliance performers. The highest performing suppliers implemented 'Self-governance' activities, including more sophisticated reporting. Fair, good and best performers participated in the 'Partnership' cluster, focusing on collaboration with multiple buyers in shared factories (such as the Sustainable Compliance Initiative and the Brown Shoe Collaboration), and suppliers' participation in multi-stakeholder initiatives (such as the FLA and Better Work). The poorest performing suppliers are in the 'Risk Management' cluster.
2010 saw an increase of adidas Group business entities which are embedding compliance practices in their sourcing and procurement policies. Fifty-five Group entities follow three-year strategic compliance plans and receive annual performance reviews. Monitoring those entities' supply chains was leveraged with more collaborative practices and data sharing through the Fair Factories Clearinghouse.
Read more about this in the Strategic developments section.