Approximately 64% of Amer Sports’ total production value is outsourced. Amer Sports manufactures approximately 23% of its products itself and approximately 13% is produced by partially outsourced vendors.
Amer Sports sources a significant proportion of its products from suppliers located throughout Asia. Amer Sports has approximately 200 external suppliers in Europe and Asia. Amer Sports value of production is divided as follows: approximately 24% in China, 36% elsewhere in Asia Pacific, 27% in EMEA and 13% in the Americas.
Amer Sports’ sourcing office in Hong Kong is responsible for vendor qualification and product industrialization, contract management and price negotiations, procurement process optimization and export administration. By leveraging Amer Sports’ scale, the aim is to provide a competitive supply of goods with a minimized business risk that ensures product quality, appropriate service levels and subcontractors who adhere to Amer Sports ethical standards.
Key features of the social compliance monitoring program
Amer Sports’ global supply chain is a complex network with employees in different countries who work diligently on the company’s products. This creates opportunities for improvements in the lives of the workers and their families. The political, economic, and regulatory conditions in these countries and the local business and labor practices may have room for improvement.
Amer Sports is dedicated to continuously improving its performance regarding labor, workplace conditions and environmental issues in its supply chain. The company aims to engage in business only with companies that meet its standards for ethical operations, and comply with the applicable laws and regulations for labor, workplace conditions and environmental compliance, as defined in Amer Sports’ Ethical Policy.
Amer Sports consults, for example, with advocate groups, customers, regulators and local communities and they share their expectations on how its products are made.
Commitment to Amer Sports’ policies
- Commitment to the following policies that guide all of its actions and operations: Company Code of Conduct (available in 15 languages), Ethical Policy (available in 24 languages) for suppliers and the Social Compliance Policy.
- The Ethical Policy is embedded into the supplier agreement which is signed by suppliers confirming their compliance with the policy.
An extensive third party audit program
- The Amer Sports’ Sourcing Office in Hong Kong ensures that suppliers follow Amer Sports’ standards for ethical operations. Amer Sports conducts third party audits to help sourcing partners comply with industry standards, regulations, and Amer Sports’ expectations with regards to health and safety, as well as its environment and social responsibility. Before the audit, Amer Sports’ CSR team provides pre-audit training to suppliers on its CSR program framework, Ethical Policy and audit standards. Suppliers provides written agreements to facilitate periodic assessment and actively contribute to remediation activities.
- Social compliance audits are conducted by internationally recognized companies, such as Bureau Veritas and UL Responsible Sourcing Inc.
- The formal third party audit includes the activities below:
- Documentation review includes government documents, compensation record and working hour records
- Management interview
- Factory tour for a visual inspection and health and safety review
- Worker interviews (independent from the participation of factory management)
- Consultation with unions or workers representative (where applicable)
- Amer Sports’ CSR team members in Hong Kong are trained on an SA8000 social and environmental management system program, which has equipped them with the necessary skills to work with suppliers on the CSR audit program and to comply with the company’s Ethical Policy.
- Amer Sports also organizes training sessions with the audit firms to make sure that the auditors understand the company’s audit standards. This ensures the audit quality and that our Ethical Policy is fully integrated into the audit practice.
- The company reviews and analyzes the audit findings to identify capacity building training opportunities and organize different trainings to improve the factory management’s capabilities. This helps prevent repeated findings of non-compliance and drive sustainable improvements. The trainings can be related to health & safety, employee relationship management and country labor code interpretations.
Strategic vendor development and performance review
- Supplier CSR scores are part of both strategic vendor development plans and the regular monthly performance review cycles. The audit findings are categorized into different risk levels indicating the priorities of the corrective actions to be taken. Facilities have to take root cause analysis of the audit findings and develop corrective action plan to improve their performance. The practice is that the facilities need to submit a corrective action plan to Amer Sports within 10 days after the third party audit. If suppliers need special support, Amer Sports’ CSR team will also schedule a remediation visit to those suppliers to re-enforce the training and jointly work with suppliers to develop the corrective action plan. After that, a third party re-audit is still necessary to verify the improvements according to the Amer Sports’ program timeframe. The CSR team maintains a complete list of audited facilities and provides monthly updates to the sourcing team.
- Suppliers who receive a full compliance result in Amer Sports’ audit are presented with a trophy for appreciation of their efforts on the CSR program. The facility’s CSR performance is also part of the sourcing score card. Suppliers are re-audited based on their previously achieved sustainability score. If suppliers are not able to fulfill Amer Sports’ CSR standards, the company reserves the right to terminate the business relation with them.
Coooperation and development
Amer Sports cooperates with various NGOs. Wilson, one of Amer Sports brands, is a category B affiliate of the Fair Labour Association (FLA). Amer Sports also engages with Better Work for the Better Factories Cambodia program for the audits in Cambodia and regularly attend the ILO’s Better Work workshops.
Social Responsibility Awareness & Capacity Building Trainings:
- Ethical Policy training both face-to-face conferences and phone calls for suppliers to communicate the Policy and explain expectations of the company’s audit program. Amer Sports’ Asian sourcing quality teams were also invited to attend the training. This enabled the company Supply chain wide cross-functional support to more effectively work for continuous improvement with suppliers.
- Workplace communication training: Amer Sports collaborated with Better Work to deliver a workplace communication training in Vietnam for suppliers in South Asian Countries. This training is expected to build mutual trust in labor relationships at supplier facilities.
Amer Sports provides direct feedback channels for supplier employees. In cases of violation of standards defined in the Ethical Policy employees can contact Amer Sports at email@example.com and their feedback is handled by Amer Sports Asian Sourcing Office in complete confidentiality.
The Ethical Policy has been printed as a poster in local languages (available in 24 languages) and placed on the wall of supplier establishments and accessible to all production workers, managers and supervisors.