We manufacture products in various regions around the world, with a complex and diverse supply chain of raw material procurement, sewing, and transportation processes. We recognize that it is our corporate responsibility to work together to strengthen partnerships with our suppliers, focusing on the sustainable development of production areas and the stable supply of high-quality products, so that we can continue to carry out best business practices alongside our suppliers. In order to continue to provide our customers with even better products and services going forward, we will not only comply with the laws and regulations of each country and region, but also engage in monitoring and procurement activities that enable us to conduct fair and ethical transactions.
Group Sourcing Policy and Group Sourcing Guidelines
In partnership with our suppliers, we have established the Group Sourcing Policy, targeting fair and ethical business dealings unique to Adastria, and the Group Sourcing Guidelines, which clearly state our expectations in the areas of human rights, social, environmental, and governance. With these, we have gained the understanding of our suppliers that we expect them to be in compliance with certain areas.
Factory Monitoring and Partnership Certification
Suppliers are asked to cooperate in compliance surveys based on our sourcing guidelines. Based on the results, our CSR procurement staff conduct factory monitoring to directly check the production environment. If any issues are identified for improvement, we ask the supplier in question to make improvements based on direct and ongoing interactions, leading to stronger engagements. We have a system in place to certify suppliers working with our production departments as partner factories, based on a comprehensive scrutiny of their systems for producing high-quality products, frequency of product defects, and social, environmental, and governance conditions.
Going forward, we will continue to expand both the number of partner-certified factories and the number of factories monitored.
Factories Monitored*
Number and Breakdown of Factory Monitoring Findings (FYE 02/2022)
Contributing to Local Human Resource Development Through a Centralized Production Management System
We have implemented a new factory management system to centralize product ordering for our factories and production control data. Until now, progression along each supply chain and the status of each factory were managed separately, but this new system offers digital order and production management operations and centralized management and system integration from production planning to purchase accounting along the value chain. With these upgrades, we can not only improve work efficiency both for internal and external stakeholders, but we can also help prevent human error and strengthen governance. Particularly in working with local staff in China and ASEAN countries, our main production areas, it would take quite some time to check information before we introduced this system. The new system has also contributed to human resource development, as seen in the improved digital skills among local staff.
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