SUPPLY CHAIN
When one of our customers slips into her favorite Talbots dress, blazer or jeans, she notices that these pieces come from countries far from her closet. It’s no secret that our products are the result of a vast global supply chain, often beginning their journey in Vietnam, Jordan, Nicaragua or other parts of the world.
Our Standards and Factory Monitoring
Although the factories contracted to manufacture products for us are not part of our company, we consider them important partners in our success and strive to ensure they provide acceptable working conditions for their workers. All factories that produce garments for Talbots are expected to adhere to The Talbots, Inc. Merchandise Supply Chain Code of Conduct, a set of standards forming the foundation of the Talbots principled supply chain.
Even before we allow a factory to produce garments under the Talbots label, we require that it undergo a social responsibility audit, in addition to a technical competence audit. Only when we are satisfied that the factory is willing and able to meet our standards, will we allow it to produce garments for us. Once approved to manufacture our garments, all contract factories agree to ongoing factory monitoring by an independent, third-party auditor, and the audit results must comply with our Merchandise Supply Chain Code of Conduct. We strive to audit all apparel contract factories at least once per year.
Addressing the Causes of Poor Working Conditions
Egregious violations of our code – such as child labor, forced labor or abusive working conditions – will be met with swift action, which will more than likely result in severing business relations with the offending factory. We recognize, however, that factories cannot be in compliance with our standards 100% of the time. To this end, our goal is to use the factory monitoring process as a way to identify non-compliance issues and to enter a dialogue with factory management to help resolve these issues, to work toward improvement and to promote better working conditions.
We want to see factory working conditions improve over time, thus it is important for us to work together with factory management. To simply stop working with a non-compliant factory does not allow us to help find solutions that ultimately benefit the lives of factory workers.
Measuring Factory Performance
In 2010, Talbots renewed focus on strengthening our long-standing commitment to a socially responsible supply chain. Together with our supply chain partner (buying agent) Li & Fung, we have strengthened our factory approval and monitoring processes. We updated the Merchandise Supply Chain Code of Conduct and are committed to gathering social responsibility audit data for all approved contract factories.
An important step in improving garment factory working conditions has been to develop meaningful metrics which we can share with our suppliers. Also in 2010, we developed a factory rating system based on the standards in Merchandise Supply Chain Code of Conduct and we share these numerical ratings with our vendor partners. These social responsibility ratings are integrated into a vendor score card where vendor partners are measured on attributes including social responsibility, as well as product quality, on-time delivery and other key performance metrics.
Investing in Supply Chain Worker Education and Empowerment
Just as Talbots invests in educational programs that enrich women’s lives through efforts like the Scholarship Foundation, we strive to invest in the women workers in our supply chain. Research indicates that investing in women’s education in developing countries has a magnified effect on helping families and communities break the cycle of poverty. Considering that approximately 75 percent of the garment workers in our global supply chain are women, it becomes clear that our investment in garment worker education can have a powerful, positive impact on the communities where we source.
In partnership with organizations like HERproject and CARE International, we work with our buying agent Li & Fung and key vendor partners to deliver high impact, factory-based educational curricula covering a range of topics like reproductive health, workplace communications and basic nutrition. To date, we have launched educational initiatives at factories in Vietnam, China, Bangladesh, Indonesia, India and Jordan.
Supply Chain Transparency: Preventing Human Trafficking and Forced Labor
In order to comply with the California Transparency in Supply Chains Act of 2010 (SB 657), we reviewed and reaffirmed our commitment to the prevention of human trafficking and forced labor in the Talbots global supply chain. We recognize the risk of human trafficking and forced labor is present in any global supply chain and we take the following measures to help safeguard our own supply chain from these risks:
1. Verification: Our team evaluates the risk of human trafficking and forced labor by reviewing country-level risk against advisories published by the U.S. Department of State and the U.S. Department of Labor. At the vendor and factory levels, our supply chain monitoring program is designed to verify that contract factories do not engage in human trafficking or forced labor.
2. Auditing: Our factory monitoring partners audit factory compliance with The Talbots, Inc. Merchandise Supply Chain Code of Conduct, which prohibits human trafficking and forced labor. In fiscal 2010, 33% of our apparel factory base was audited by an independent, third-party auditing firm. The remaining 67% were audited by Li & Fung’s vendor compliance team. Approximately 4% of all active apparel factories in fiscal 2010 received unannounced audits. In fiscal 2011, our goal is to increase the percentage of apparel factories that are audited by an independent, third-party auditing firm. We also plan to increase the percentage of factories that receive unannounced audits.
3. Certification: All vendor partners must certify that they comply with The Talbots, Inc. Merchandise Supply Chain Code of Conduct, which prohibits human trafficking and forced labor. We require certification on an annual basis of all factories that produce for Talbots.
4. Internal Accountability: All Talbots employees and contractors are expected to conduct themselves according to the guidelines described in the Talbots Code of Business Conduct and Ethics. By acknowledging the standards within the Code of Business Conduct and Ethics, each employee agrees to “comply with all federal, state and local laws, rules and regulations of the U.S. or the province and country in which you are located or where you are a guest.” These laws include, among others, wage and hour laws which address actions that would be complicit with forced labor.
5. Training: In 2011, we developed an interactive training module on the prevention of human trafficking and forced labor specific to the Talbots global supply chain. All Talbots supply chain employees, including supply chain management, were required to participate in the training module and it was also delivered to our buying agent offices overseas with the request that anyone involved with the Talbots account participate. In addition, we distributed a web-based version of the training module to our vendor partners and ongoing training will be made available to Talbots employees and buying agent partners.