In 2014, 72% of contract factories rated Partner or better, compared to 59% at the end of 2010.
Learn more about how we are addressing excessive working hours across our supply chain.
In 2014, 100% of footwear and apparel contract manufacturers were introduced to the Higg Index Facilities Social Module
Our products are made in many different countries around the world, some of which have a high risk for labor violations. For this reason, after a factory passes a third-party assessment it is monitored continuously and measured against industry standards and the Brooks Code of Conduct to ensure they meet our values and business standards.
Factories are monitored via third-party assessments according to their risk levels. For example, a supplier that lacks sufficient management systems in health & safety, labor, and human resources will be monitored at least on an annual basis. Those suppliers that have established solid management systems and are in low risk countries are monitored less frequently, generally every other year. Suppliers in high-risk countries are monitored at least once a year, in some cases several times per year.
Our factory rating system reflects our approach in monitoring supplier's compliance to our standards, with the ultimate goal of reaching our Supplier Leadership rating category where our factories have greater ownership over their fair labor programs. At a minimum a factory must achieve a Partner Supplier (Yellow or above) to continue manufacturing Brooks products.
Remediation & Continuous Improvement
Our continuous improvement philosophy is aimed at creating systems that will not only correct the issues found, but will prevent them from occurring in the future. When assessing our factories, we track the results to recognize patterns and systematic failures with the goal of better understanding the issues and being able to direct our efforts to help those who need it most.
Should issues arise in our supply chain, our first course of action is to partner with factory management and workers to determine root causes and devise a continuous improvement plan. We encourage management to take a holistic approach of not only addressing the issues, but also putting systems, policies, and procedures in place to prevent issues from reoccurring. For factories that lack the skills, tools, and knowledge to address the issues, we engage with factory management through training and capacity building.
In factories where Brooks has dedicated production lines we recognize that our purchasing practices, especially during peak periods, can have a negative impact on factory working hours. We are continuing to work cross-functionally within the organization to implement innovative solutions to address footwear capacity planning.
Measuring fair labor performance at our contract footwear factories provides an opportunity to create a dialogue around the root cause of compliance gaps and consider opportunities to close them through systems and process improvement. We utilize the Footwear Balanced Scorecard as the platform for dialogue, feeding key outputs from the third-party assessments and the remediation process to discuss performance and continuous improvement. To ensure alignment, Brooks' departmental leaders in Costing, Development, Sourcing, Commercialization, Quality, and Corporate Responsibility meet with factory leadership to conduct a quarterly business review of successes and opportunities for performance improvement in each functional area, for both Brooks and the factory. The factory also completes a reverse scorecard for Brooks' departments on key indicators, ensuring a robust two-way dialogue for our own internal improvement.
Rewarding Good Performance
We are taking concrete steps towards rewarding factories that are doing well and meeting our standards. Once a factory is approved for production, we continue monitoring it and rate them each year on their fair labor performance through the third-party audit process. This score is then fed to the Footwear Balanced Scorecard which includes scores from other business departments on quality, delivery, innovation, and environmental performance. The footwear sourcing managers then use this score to decide how many orders the factory will receive in future seasons. As for apparel, this process is in the works so stay tuned.
Our sourcing strategy is based on forming long-term partnerships with premium suppliers. We work to empower factory management to treat workers well and maintain a safe and healthy workplace. If, however, we find they are not meeting our standards, we do not hesitate to take action. A letter is sent to factory management asking for their commitment in fixing all non-compliance issues. Depending on the issues found, we try to be a good partner by offering training opportunities to help factory management address the problem and put systems in place to prevent it from reoccurring. However, if a factory fails to make progress over a specified period of time, we terminate the business relationship. If we find very serious issues at a factory, such as critical safety or human rights issue, we may immediately end our business relationship.
Higg Index Facilities Social Module
The Higg Index Facilities Social Module is a self-assessment tool that provides a standardized measurement of social impacts across the apparel and footwear industry. The tool offers clear guidance on social impacts in manufacturing, and provides a resource to our contract factories to identify improvement opportunities to help them to own and continuously improve their labor management performance. Although our requirement is an annual update of the Facilities Social Module, our expectation is that contract factories use this tool on an ongoing basis throughout the year to help improve performance.
Brooks' adoption of the Higg Index Facilities Module supports the wider footwear and apparel industry in creating a common language for discussion and action on social responsibility and environmental sustainability that in turn will reduce the assessment and audit burden currently affecting factories across the industry.
Tier 2 Engagement
In 2014 we risk-mapped our entire Tier 2 materials supply chain, and identified the top 30 suppliers and subcontractors to focus on. We began taking steps to introduce them to our program, including site visits and self-assessments to measure compliance to our standards.