Responsible supplier management
Fiskars production strategy is based on combining our own manufacturing operations with selected suppliers. Our goal is to build a strong supplier network that can satisfy our business needs and meet our corporate values and expectations with regard to social and environmental requirements. Fiskars is sourcing finished goods from suppliers in Europe, North America and Asia. The biggest sourcing countries are China, Taiwan, Thailand and Vietnam.
In recent years we have worked on many fronts to incorporate sustainability into our sourcing operations. Fiskars’ suppliers provide us with finished goods, raw materials, components and services. We have created a process to manage our finished goods suppliers’ sustainability and we are going to expand it to other raw material, components and services suppliers in the future.
Fiskars Supplier Code of Conduct
Our requirements and expectations are outlined in the Fiskars’ Supplier Code of Conduct (SCOC). It includes our expectations regarding our suppliers’ ethical, social and environmental conditions. The SCOC is an integral part of supplier’s contract with Fiskars Corporation, and every supplier must sign and commit to it in order to do business with Fiskars. Fiskars expects its suppliers to comply with the SCOC requirements not just when collaborating with Fiskars, but also with their own employees and suppliers, third parties including authorities, and all other partners.
Risk assessment and monitoring of suppliers
In 2011 Fiskars established the supplier audit program that we run today and have developed since. Based on the SCOC policy we have created a checklist that is used to evaluate all suppliers that Fiskars wants to do business with.
The decision to make an on-site audit is based on a risk assessment that takes into consideration the country risk, the size of the business and the industry. All suppliers in high risk countries are audited on-site by Fiskars. Fiskars has a professional auditor team of four people that performs audits in countries in the Far East and South East Asia. In addition, we use third party audit services to complement our own audits when needed.
An audit consists of document reviews, factory tours, and interviews with several workers. The questions are divided into three levels of significance (zero tolerance, normal, advanced) and the results are described with a percentage score.
In 2016 we did 115 on-site audits of our suppliers. Five of the audits were performed by a third party service provider. We have a high ambition level with regards to selecting and developing long-term partnerships with our suppliers. Before we engage in business with a new supplier, we expect them to meet our requirements. In cases where we identify any zero tolerance issues, such as with issues related to fire safety or excess working hours, Fiskars does not initiate collaboration with the supplier.
We work together with our suppliers to encourage continuous development. After the first audit visit, our auditors visit suppliers regularly to track progress and verify improvements. A new audit is performed every second year. If deviations occur in the audits with existing suppliers we ask the supplier to submit corrective action plans. In cases where the supplier is not capable of complying or shows unwillingness to comply with our Supplier Code of Conduct within a given timeframe, we end the business relationship. The decision to do this is taken at a high level within our organization to ensure fair treatment of vendors.
Training and collaboration
We are committed to supporting and working in collaboration with our suppliers. We arrange yearly supplier workshops to provide training, and to share good practices, ideas and concerns with our partners.
In 2015 we established the Sustainability Development Program to deepen collaboration with key suppliers on sustainability. Seven of our strategic suppliers participate in the program where we aim to go beyond auditing, encouraging suppliers to develop their own management systems and achieving measurable results in pollution prevention and health and safety.
In November 2016 we commissioned KPMG to review and comment our process for managing supplier sustainability. Their report indicated that in addition to the practices and processes already in place, we have room to improve in areas such as extending the sustainability processes to cover in-direct suppliers and further deepening our collaboration with suppliers.