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Companies have a lot of pressure to go green from increasingly for product and supplier quality control.
informed consumers and being green is now a competitive advan-
tage. For example organic cotton is very popular. We work with Are things improving?
independent farmers who participate in an organic cotton farming Overall things are getting better especially compared to 8 years
initiative where farmers can make ago. Suppliers have upgraded
a decent living and consumers can themselves and are eager to fol-
feel good about what they are buy- low up on the suggestions our-
ing. selves and other buyers have
We believe in giving back to the made. Especially in this market,
communities where we work and suppliers have to be very competi-
are most proud about the work we tive in order to succeed and being
have done in education. We have CSR compliant makes them more
built a primary school in Southern competitive.
China which serves around 2000
students. We have also built a train- Has the sourcing environment
ing centre in Thailand for refugee changed in the face of the
kids and have projects in Bangla- global economic crisis?
desh and Mumbai for street kids. One of the biggest things we’ve
Eurogroup has also set up a trust seen recently is a lot of factories
fund to find meaningful projects to closing. The first wave came with
support. the Mattel toy recall which raised
red flags on quality issues and prompted a closer look at the qual-
Managing suppliers is one thing, but how do you ensure ity of suppliers. The second wave came with the financial crisis
that sub-suppliers are complying with quality and CSR stan- last year. At least 4,000 suppliers went bankrupt and we’re not
dards? sure how many sub-suppliers have been impacted.
The product part is easier since we have measures in place to
check this. The CSR part is harder and requires monitoring the What trends do you see happening in global sourcing?
whole supply chain right from the beginning. For the BSCI Audits One of the biggest trends we have seen is an upgrade in quality
(a European standard initiated by the FTA, BSCI= Business Social driven by suppliers and buyers. For example at this year’s Canton
Compliance Initiative) we work with the goal that 80% of the supply Fair, we saw a lot of innovation in product design because of the
chain has to comply and we do spot checks on factories to ensure pressure on the market. This goes along with the impetus we
compliance. One of our roles is to develop suppliers and work with have seen for companies going green. There is also a big focus
them to ensure both the supplier and the sub-suppliers are able to on creating an integrated supply chain which means companies
work to certain standards. Our internal and external quality assur- are calculating their order sizes more closely and managing their
ance staff are constantly at the supplier sites/factories to ensure inventory better. There is an incredible amount of innovation in
a high quality level. We do 6000-8000 QC Measurements per year the market.
Eurogroup management visit the school they built in Southern China. JULY/AUGUST 2009 13
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