Our Code of Conduct serves as a foundation for supply chain responsibility, but our efforts go far beyond establishing and communicating expectations. We have developed a rigorous approach to training, monitoring, auditing and working with suppliers, all geared towards continuous improvement.

On a quarterly basis, we review overall performance of suppliers (which includes evaluating and providing feedback on CSR performance), to determine ongoing business strategies and allocation. Overall strong performance is rewarded with more business when all other requirements are met. As CSR is part of the business strategy, suppliers have incentives to improve human rights and environmental management.

Pre-Approval
The Corporate Social Responsibility (CSR) department reviews new facilities before they are approved to manufacture our product. We only approve those Suppliers who demonstrate a commitment to social compliance and who are transparent about their performance. This practice provides a high degree of insight into suppliers’ labor practices from the beginning of each relationship. Potential suppliers complete a pre-sourcing packet of information, which includes information about:

•  Each facility they plan to use for our branded product, including subcontractors.
•  The supplier’s compliance program, including adherence to relevant legal requirements and internal monitoring practices.
•  A signed agreement from the supplier and each manufacturing facility to comply with our Global Supplier Principles and Guidelines and allow unannounced monitoring by third-party representatives.
Supplier Orientation
Once a new supplier is approved, the CSR and Sourcing departments conduct New supplier Orientation meetings to discuss our business expectations and explain the business impacts of poor compliance. This also gives us a greater understanding of our suppliers’ internal compliance programs.
Monitoring & Auditing
suppliers’ facilities are monitored on an ongoing basis and we prioritize audits based on business volume and compliance risk. Our audits are conducted to get the best possible picture of regular facility operations. To achieve this objective:

• Audits are always unannounced to ensure that facilities have not made any temporary alterations for the visit.
• We focus on information received during individual and group worker interviews. Where we have concerns about confidentiality, openness or retaliation, we conduct interviews off-site.
• We hire experienced third-party auditors to conduct audits, and our CSR staff periodically shadows the auditors.
Training & Remediation
Sustainable Remediation is a key component of our program. We prefer to work with existing suppliers to improve their performance, and only disengage when we feel they cannot make progress. With this approach, we are working to help drive long-term sustainable change by building suppliers’ capacity for compliance. We work with suppliers to build Sustainable Remediation Programs (SRPs) that focus on critical issues such as wages, working hours and transparency.

We begin each SRP with a meeting to communicate expectations, confirm shared goals and identify where third-party expertise might be brought in for consulting. During SRPs, we replace auditing with ongoing monthly progress updates, which we believe will allow the facility to maintain a strong focus on its continuous improvement program.

At the conclusion of the program, we conduct a verification audit to allow facilities to demonstrate that proper management systems and corrections have been implemented.
Capacity Building
At ANN INC. we know that auditing alone will not drive change in our supply chain, and that we need to focus our resources on supplier development and capacity building programs. Through our ANN CONNECTs program, we work with our strategic suppliers to give them the tools to build and implement their own programs and improve the compliance levels at their facilities.

Learn more about ANN CONNECTs here.