Sedex Group

Effective management of supply chain risks

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Sedex
The global provider of choice for responsible supply chain solutions
Focus on 4 key areas; Labour standards, Health & Safety, Environment & Business Ethics Core objectives of reducing duplication and driving collaboration Largest system for sharing ethical trade data in the world Enables a risk based approach, flexible, cost effective & time efficient More than 550 brands and retailers along with circa 30,000 suppliers Operates in more than 150 countries, multi lingual system 5 offices, London, New York, Shanghai, Brussels, Santiago Not for profit organisation owned by our members Provides end to end support for companies ensuring program success

www.sedexglobal.com

Some of our members

Drivers for better supply chains

Meet consumer expectations protect reputation Ensure product continuity

Enhance company value and competitive position

Meet legal & regulatory requirements

What does the future hold?

Compliance

Compliance

Traceability

Traceability

Compliance

Compliance

Traceability

Traceability

Supply chain challenges

Global different language, different legal requirements, different issues, different responses

Challenges are complex buying practices helping or not

Knowing the real risks and issues Greater transparency required who is in the supply chain Differing standards and buyer requirements ILO, Ruggie, ETI, GSCP Regulatory & Legal requirements local and global Frequently change long term, season, transactional Greater public awareness and access to technology enables others to control the storytelling

Sustainable development is about sustainable solutions

age of problems
Poverty and inequity Epidemics and health crisis

age of solutions
Sustainable development

Climate change
Biodiversity loss Financial crash Security threats Environment

Italy 9% 25% 8% 25% 6% 24% 0.9 1.1 1.0 0.7 1.5 1.4 0.9 0.8 0.8 0.8
Code and system implementation Inadequate storage facilities for hazardous chemicals Excessive working hours/ overtime hours
Compliance of the site with laws and regulations No rest day for each 7 days The facility lacks the permits required by local law Provision of premium rate for overtime in comparison with local law Exit signage missing or inadequate
Global

Spain

France

Portugal 18% 19% 17%

No certificate/ certificate expired

Germany

Country

Not buyer BEWARE but BE AWARE

United Kingdom

% of Total % of Total % of Total Avg Audits Avg Issues Sites Audits Issues Per Site Per Audit

23% 24% 26% 0.9 1.2

Lack of eye or needle guards on sewing machines

11% 10% 11% 16%

8%

14% 13%
0% 2% 4% 6%
10% 12%

Top Ten Global Non Compliances

14% 16% Agents/Intermediaries

Key issues found in Chile

Category Environment 1 Labour Standards 2 Issue Detail Non-compliance of the site with local and international environmental laws and regulations Individual time records missing or incomplete

Health & Safety 3

Management Systems (Corporate) 4 Health & Safety

Absence of provision for safe handling/storage/disposal of hazardous chemicals Code and system implementation
Inadequate storage facilities, labelling, training, containment or spill kits for hazardous chemicals or lapses in their use Fire fighting equipment inadequately installed/ not installed Inadequate systems for recording working hours Adequacy of provision for safe handling of hazardous chemicals Suitable PPE not consistently worn or maintained

Top 5 issues globally

1. 2. 3. 4. 5. Fire Safety H&S Management Working hours Storage & Use of Chemicals Worker Health

5
Health & Safety 6 Labour Standards 7 Health & Safety 8 Health & Safety 9

Labour Standards
10

Daily working hours / overtime hours exceeded the legal maximum

And if you dont manage these issues..

Collaborate to succeed
Doing it alone is more difficult collaborate Your largest risks are in your supply chain and not in tier 1 Engaging with suppliers is key but the hardest part.

Approaching each supplier independently is not effective and causes duplication

So what should business do?

Buyers Buyers should clearly communicate their requirements Work with suppliers to build improvements over time Consider buying practices and their impact on suppliers Adopt existing models to reduce duplication and enable greater collaboration Use the data available and go beyond tier 1 Suppliers Suppliers should know their strengths and weaknesses, self assessment and audits are useful tools Use tools to understand how to make improvements http://www.sedexglobal.com/resources/supplier-workbook Manage your supply chain responsibly too Communicate your activities

Thank You
carmel.giblin@sedexglobal.com
Jose Manuel Melero (Chile Regional Representative)

jmelero@cicloambiente.cl

www.sedexglobal.com www.sedexsolutions.com
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