We believe our relationships with our suppliers are a huge part of our success. Building strong long-term partnerships through fair and equitable dealings will foster trust and innovation. These positive relationships will in turn provide our customers with the best possible products in the most sustainable way.
We will achieve a top quartile ranking in how we engage fairly and equitably with our suppliers as measured by independent supplier surveys.
In order to better understand our suppliers, we continue to work closely with the Advantage Group, an independent body that measures business relationship perceptions and benchmarks these against industry peers. In 2017 we made good progress on our 2020 commitment to achieve a top quartile ranking in how we engage fairly and equitably with our suppliers, with some encouraging improvements across the business: supermarkets moved from the 4th quartile to the 2nd quartile (up eight places), BWS moved from the 4th quartile to the 2nd quartile (up six places) and Langton’s moved into the first quartile (up 15 places). A key contributor was the introduction of Voice of Supplier (VOS) across the Group: a pulse survey independently managed by the Advantage Group. VOS provides regular feedback which has allowed us to understand our suppliers and address concerns in a more timely manner.
Woolworths Supermarkets continues to provide business updates to its supplier base twice yearly, and recognises best in class performance at our Supplier of the Year awards. In 2016 awards were handed out in 23 categories, including, for the first time, Sustainable Supplier of the Year and Organic Supplier of the Year.
Our Sustainable Supplier of the Year Award encourages our suppliers to further develop their business models to be environmentally conscious. By nurturing these changes for good, we aim to increase best practice sustainability across a wide range of industries and filter these practices through our supply chains. Our 2016 winner was Natures Organics for Food Waste and Packaging. The Company demonstrated admirable results in its recycling program, including using over 1.7 tonnes of recycled plastic to manufacture 42.4 million bottles during FY16.
We firmly agree that customers should have as much information as possible about where their food comes from. We were the first supermarket to label our own brand products when the Federal Government introduced the Country of Origin Labelling reforms in 2016. We are proudly going beyond the minimum legal requirements, and are labelling all of our own brand products including compliant labelling online.
Our Endeavour Drinks’ Good Buyer and Supplier Principles set standards for our buyers to follow when dealing with suppliers. The purpose is that all parties act with fairness and transparency. This is in support of our landmark 2014 agreement with the Winemakers’ Federation of Australia. Using tools such as our supplier portal, we work to make sure all suppliers, both big and small, have a chance to range their products in our stores.
BIG W has committed to holding a supplier conference every six months. This will inform key suppliers with business plans, performance updates, and address any key issues from the VOS survey.
In March 2017, Countdown launched its Supplier Charter, outlining principles for conducting supplier relationships and including a dispute resolution process. The Charter frames the expectations we have for our own team and our suppliers regarding how we do business together.
As a modern-day retailer, we are constantly faced with complex issues when sourcing goods through our extensive supply chain. Our goal is: “We will focus on a best practice compliance system according to the Global Social Compliance Program.”
We will focus on a best practice compliance system according to the Global Social Compliance Program. We will collaborate with peak organisations to improve workers’ lives.
Improving working conditions
Woolworths is committed to respecting human rights for our own team members and the workers in our supply chain in alignment with the principles and guidance contained in the United Nations Guiding Principles on Business and Human Rights. We are evolving our approach to management of human rights in our supply chain and we expect that this will be a multi-year journey. We are committed to transparent reporting of our progress each year in our Corporate Responsibility Report.
We have commenced a Group-wide holistic review of our ethical sourcing practices to help us reach our 2020 goal, and have become members of SEDEX, a global non-profit organisation for sharing responsible sourcing data on supply chains. As part of our review project, we will assess potential human rights risks through the full scope of our value chain: inside our organisation, tier 1 suppliers down to raw material suppliers, and also including distribution and warehousing. We will use the outcomes of this assessment to determine our areas of focus, in accordance with the UN Guiding Principles, which encourage the prioritisation of salient issues and risks.
We expect all suppliers to comply with our ethical sourcing policy, which has a compliance audit program for factories making our own brand products. We engage experienced third-party certification bodies to conduct the audits and to rate factories as approved, conditionally approved or at risk. Factories at risk or that need critical corrective actions cannot start production for Woolworths until these issues are resolved.
As a signatory of the 2015 Australian Business Pledge against Forced Labour, we have acknowledged a responsibility to identify and address any confirmed instances of forced labour in our supply chain. Effective remedy requires multi-stakeholder engagement and we are working together with other Pledge signatories to examine best practice approaches to remedy.
All of our fresh produce suppliers have now undergone verification checks against our Policy for Employing or Engaging Overseas Workers. Whilst these checks revealed a high rate of compliance, we are striving to continuously improve our management of this important issue and we are currently reviewing our policy, with engagement and input from our suppliers.
Our BIG W Asia supply chain team has continued to focus on safety improvements to make sure that both new and existing suppliers comply and adhere to our ethical sourcing policy. This includes our work with the Bangladesh Accord, where we have achieved an overall company ranking of 99/206. The current remediation progress rating is sitting at 81%, well above the overall average progress rating for all members of 77%.
Spencer Fashions is a small manufacturer of men’s denim in Bangladesh. It has supplied BIG W for many years. BIG W is the lead brand responsible for this factory under the Bangladesh Accord agreement, so we wished to enable the growth of this company. During our close relationship with this key supplier, we have recently worked together to improve the factory and its working conditions. This included improving the factory layout, which has helped improve the work flow and reduce wasted material handling. Improvements are continuing and we are very happy to have helped build capacity in this partner manufacturer.
During the year, we launched our new Supplier Excellence Program to improve the quality and product safety standards across our extensive global sourcing network. The launch included a series of roadshows in Australia and Asia, including Shenzhen, Bangkok and Shanghai. The program has streamlined our quality processes, applying clear standards and a risk-based approach. This includes supplier excellence standards, industry standards and codes of practice, as well as a specific code of practice for employing or engaging overseas workers for our domestic supply chain in Australia and New Zealand.
1 More details on our Ethical Sourcing Policy can be found at: Labour Practices in our global supply chain