Being an asset light organization we understand the challenges posed by the supply chain. AFL is committed to doing business with high ethical standards.
We have recently re-introduced the ‘Responsible Supply Chain guidelines’ which contain the minimum sustainability standards that our vendors are expected to meet and good practices that may be adopted. These guidelines are instrumental in ensuring that we achieve desired business objectives while making a positive social impact and reduce the overall environmental impact of our operations.
The guidelines are applicable to all the final good (FG) vendorpartners and act as a screening mechanism for any vendor that is willing to do business with AFL. AFL’s process for screening and evaluating the company’s vendor base ensures a sustainable and systematic sourcing practice:
- 80% of the final goods vendor factories to be compliant with RSC guidelines by 2019
- On-board 75% of our strategic vendor partners on Higg Index by 2019
On receipt of an association request, we inform the vendor about the quality criteria, commercial conditions and the RSC guidelines
We undertake an initial assessment of the vendor to check:
- Compliance with the RSC Guidelines
- Capability to meet the quality criteria
- Financial stability and ability to sustain
Once approved, we monitor the performance of the vendor partner through an ongoing evaluation process.
We regularly engage with our vendor partners to help them develop corrective action plans and improve their performance. In case a vendor partner is unwilling to improve to meet the expected standards, we maintain the right to end the relationship.
Using Higg Index to gauge sustainability performance of vendor base
Arvind is a founding member of the Sustainable Apparel Coalition (SAC). SAC developed The Higg Index, a suite of tools that enables brands, retailers, and facilities of all sizes, at every stage in their sustainability journey, to accurately measure and score a company or product’s sustainability performance.
As on date, we have more than 50 vendor partners on the Higg platform. We envisage to have more vendor partners on the Higg Index in the near future while helping the existing ones to improve their performance on a continuous basis.