Supply chain

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Supply chain

  1. 1. Social Supply chain At a glance Kingfisher overseas sourcing offices 433 factories were audited by Kingfisher’s overseas sourcing offices in 2007/08 to assess compliance with the Kingfisher Code of Conduct for Factory Working Conditions. Kingfisher’s overseas sourcing office in China (Kingfisher Asia Ltd) has worked with partners to provide a mobile health and welfare service for factory workers. Kingfisher operating companies A Supply Chain Toolkit was developed to help operating companies assess suppliers and their factories for compliance with the Code. Across Kingfisher’s operating companies, 214 suppliers/factories had an onsite assessment in 2007/08 and 435 received a desktop assessment on factory working conditions. training Workshops/training for factory managers continued in China and India, attended by 170 individuals. 24
  2. 2. Performance Customers want quality and Kingfisher’s overseas for Factory Working Conditions innovative products at affordable and all critical failure points must prices, but not at the expense sourcing offices be resolved before any orders of the welfare of workers or Kingfisher overseas sourcing offices can be placed. All factories are the environment. Kingfisher’s are based in Brazil, China, Hong reassessed on a regular basis (at Code of Conduct for Factory Kong, India and Poland. A revised least once every three years). Working Conditions sets out Factory Assessment Programme for Factories must agree action plans standards for suppliers on labour the overseas sourcing offices was if improvements are required, and environmental conditions introduced in 2004. This ensures all which must be implemented within in factories. The Code identifies new factories are audited against specified time-frames. A five-tier nine minimum requirements the Kingfisher Code of Conduct (referred to as critical failure points) that all factories must comply Factory audits – Kingfisher overseas sourcing offices with. It also sets out additional 2005/06 2006/07 2007/08 standards that suppliers are expected to meet over time. Factory audits Kingfisher’s approach to assessing Total number of factories that supply products unavailable 897 854 compliance with the Code is to the overseas sourcing offices tailored for its different types of Number of factories that had onsite audits to 604 644 433 sourcing operations. Kingfisher’s monitor compliance with Kingfisher’s Code of overseas sourcing offices buy Conduct for Factory Working Conditions directly from factories and procure Factory action plans almost 10% of products sold across the Group (including own-brand Factories that were required to make 57% 72% 89% and exclusive brand products). improvements – through an action plan Kingfisher’s operating companies to be completed by the year end source products through suppliers (% of factories assessed) (agents or manufacturers). Factories that were required to make 4% 2% 1% improvements – through an action plan to be completed after the year end (% of factories assessed) Factories that implemented action plans 81% 80% 87% (% of factories with an agreed action plan to be completed by the year end) 25
  3. 3. grading system is used to encourage the three-year re-audit cycle). action plans, there was a significant factories to progressively adopt The other existing factories will improvement in grades – the higher standards over time. be reassessed within the next two proportion of factories achieving years. 89% of the 433 factories grades 1–4 (out of the factories that In 2007/08, 433 factories were that were audited were required implemented their action plans) audited – these included first time to make improvements through an increased from 18.2% to 99.7%. A audits for 100% of all new factories action plan to be implemented by number of specific projects are also used by the overseas sourcing the end of the year, and 87% did underway to help improve health offices and repeat audits for 35% so within the agreed time-frame. and welfare for factory workers of existing factories (in line with Following implementation of these (see case studies on page 28). To promote awareness, Kingfisher Factory action plans following audit by Kingfisher overseas sourcing offices has an Information Pack for factory managers, which includes 10% a handbook, a series of CR fact FACTORIES THAT WERE NOT REQUIRED TO MAKE IMPROvEMENTS sheets and guidance on workplace laws in China and India. In 2007, 1% four new fact sheets were added FACTORIES THAT to clarify Kingfisher’s standards WERE REQUIRED TO on hygiene, first aid boxes, zero MAKE IMPROvEMENTS – THROUGH AN tolerance of child labour and the ACTION PLAN TO BE prohibition of deposits which COMPLETED AFTER 2007/08 make it difficult for employees 31 JANUARY 2008 % to leave. The guide to workplace FACtORiES ASSESSED laws in China was also updated. 89% FACTORIES THAT WERE REQUIRED TO MAKE IMPROvEMENTS – THROUGH AN ACTION PLAN TO BE COMPLETED BY 31 JANUARY 2008 (87% OF THESE IMPLEMENTED THEIR ACTION PLAN) 26
  4. 4. Kingfisher operating Trade Depot, Brico Dépôt Spain training workshops and Castorama Russia, which are companies required to do so by January 2009). Workshops/training for factory In 2007, Kingfisher completed managers have continued in China a review of supplier/factory Across Kingfisher’s operating and India. Koçtas is also planning ¸ assessment processes within companies, 214 suppliers/ a similar workshop in early 2008. individual operating companies. factories had an onsite Following this, a Supply Chain assessment in 2007/08 and training workshops 2005/06 2006/07 2007/08 Toolkit was developed which 435 received a desktop – Kingfisher Group sets out a methodology for assessment on factory working engaging with suppliers on conditions. Examples include: Number of individuals factory working conditions B&Q China – 186 factories within the supply chain to ensure a more consistent were audited and three training (e.g. factory managers) 230 211 170 approach across the Group. attending workshops on workshops were held which factory working conditions The toolkit provides templates for were attended by around Number of Kingfisher conducting assessments, including 100 factory managers. employees attending 99 192 272 initial desktop assessments and B&Q UK – 385 assessments workshops on factory onsite factory audits. It also sets working conditions were carried out on factory out a process for going beyond working conditions. These included monitoring to engage with suppliers a combination of self-assessment in other ways, e.g. workshops and questionnaires (337 suppliers), site specific improvement projects. audits (15 suppliers) and factory The toolkit recommends a phased record book reviews (33 factories). approach – focusing first on high-risk In 2007, B&Q UK joined Sedex suppliers, including those that supply (Supplier Ethical Data Exchange), own-brand products and those a web-based database to promote based in countries where ethical the sharing of data on ethical audits. standards are not enforced by law. The majority of Kingfisher’s operating companies have developed action plans on supplier assessments (with the exception of Castorama Poland and Kingfisher’s three newest operating companies, 27
  5. 5. Case studies Kingfisher Asia ltd (KAl) – Aricia – promoting health Kingfisher – continued mobile health and welfare and safety in indian factories support to HiV/AiDS service for factory workers Kingfisher’s overseas sourcing project in South Africa Kingfisher’s overseas sourcing office office in India, Aricia, is working Kingfisher continued to contribute in China (KAL) has launched a new with factories it sources from to funding for a mobile clinic which project to promote the health and promote health and safety. An visits factory workers and their welfare of factory workers. During initial workshop was held for families in the KwaZulu-Natal 2007, it started to work with the factory managers on working region of South Africa. This offers China Labour Support Network conditions in November 2006. voluntary and confidential HIv/AIDS (CLSN), a local non-governmental Following the workshop, the 24 testing, counselling and treatment organisation, to provide a mobile participants were asked to complete as well as primary healthcare to health and welfare service for a 13-point audit questionnaire on workers at participating factories. migrant workers, the Occupational health and safety and to prepare Since the clinic was set up in Safety and Health (OSH) Express. an action plan for improvement. 2004, over 15,000 patients have The mobile unit visited three A follow-up telephone survey received primary healthcare and factories used by KAL – spending was conducted during 2007/08 around 4,500 people visited the a day at each factory conducting by an independent organisation, clinic in 2007. A peer education health checks for workers (e.g. blood Business Trading Ethically, to get programme is also run, with 81 pressure and eyesight tests) and also a more detailed understanding peer educators trained to date. carrying out an evaluation of health of progress in this area. Six of the The project is co-ordinated by a and safety on the factory floor. factories had identified specific local consultancy (TLC) and run in Feedback was provided to areas for improvement and had cooperation with the government. both factory workers and completed these actions by the The project is also being extended the management teams with end of the year. The remaining to help orphans and children recommendations on how to factories had confirmed their (in partnership with Save the improve conditions. The visits commitment to the principle of Children) and women in the rural were jointly funded by Kingfisher ‘continual improvement’. A further area of Impendle (in partnership and the factories themselves. workshop was held in March 2008. with Women in Business). 28

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