Engagement with Suppliers
Traceability of the supply chain is a key priority for Inditex and is viewed as the first step towards ensuring supply chain sustainability. As part of its supply chain management strategy, production traceability enables Inditex to ensure that each product is manufactured with maximum compliance with labour, environmental, and product health and safety legislation, and with the labour and social principles set forth in Inditex’s Code of Conduct for Manufacturers and Suppliers.
In 2012, Inditex incorporated traceability into its Code of Conduct for Manufacturers and Suppliers, requiring that each supplier declare all production units regardless of tier and process.
To facilitate this undertaking, Inditex created the “Manufacturer Management System” in 2013, an online platform through which suppliers can input all factories used for manufacturing orders across all processes and tiers of the manufacturing process. The data provided is then used during a “traceability audit” where internal auditors not only assess each factory’s production capacity, but also cross-check that all production units reported through the Manufacturer Management System are correctly declared and approved.
Because the Manufacturer Management System was specifically designed to cover Inditex’s traceability needs comprehensively, the system is also integrated with other company tools, such as the order platform used by Inditex’s purchasing teams and the internal supplier supervision tool available to Inditex’s Sustainability teams. Additionally, all data collected through the system is consolidated into a single database, enabling purchasing teams, Sustainability teams, and suppliers to share and access complete information in real-time on the behavior of the supply chain in relation to Inditex’s standards.
Aside from mapping and monitoring the supply chain, Inditex also conducts regular trainings and awareness-raising among suppliers on good practices around production traceability.
The method outlined above has enabled Inditex to globally monitor its supply chain - regardless of tier and process - and to guarantee that all workers involved in Inditex’s production are covered by the programmes set out in the Code, designed to protect their rights.
Creating specific traceability tools and programmes that are integrated in the business model allows for a more efficient control of the supply chain and a smooth cooperation between suppliers and Inditex teams.
• In 2014, 1,625 suppliers reported 5,382 factories in the areas of fabric, cutting, manufacturing, dyeing and washing, printing, and finishing
• In 2014, more than 2,463 production audits were performed, compared to 820 in 2013
• 266 breaches were detected