Traidcraft’s approach to evaluating suppliers Alistair Leadbetter, Business & Training Consultant Traidcraft Consul

1. Traidcraft’s approach to evaluating suppliers Alistair Leadbetter, Business & Training ConsultantTraidcraft Consult

2. Overview of presentation • Context • Mission and approach • Our supplier base • Evaluation tool & process • 2 way feedback – approach & lessons • Questions

3. Traidcraft at a glance… • Started in 1979 importing crafts from Bangladesh during famine • 2 parts to Traidcraft – Traidcraft Plc & Traidcraft Exchange • Traidcraft Plc turnover 08/09 over £21m • Roots in crafts but now over 85% turnover comes from food & consumables • Multiple channel approach: • Fair Traders • Mail order & e-commerce • Wholesale • Fair trade and independent retailers • Mainstream partners eg M&S, Monsoon, Lakeland • Licensing partnerships eg our Geobar. Also juice, toilet tissue, confectionary & new developments like rubber gloves & charcoal

4. Traidcraft Consult Traidcraft’s business consultancy Offer services to businesses keen to adopt and improve responsible and ethical practices Act as a critical friend on social issues inherent in international supply chains Build understanding and support change Work closely with businesses in the UK and overseas Research and evaluate supply chains

5. Traidcraft’s mission We fight poverty through trade, practising and promoting approaches to trade that help poor people in developing countries transform their lives.

6. What that means in practice…. • Traidcraft plc chooses to work with poor and small scale producers in developing countries • We work in partnership with our producers ...committing to long-term relationships and engaging in regular contact • We invest in development of producers to help them build professional sustainable businesses • We still have to run a profitable business! • Traidcraft plc is a profit making business, not a charity • We try to model a fair for all way of doing business • Our development work is paid for from the profits of the business

7. Our crafts partners… • 42 partners in 17 countries • Range from large intermediaries with multiple producer groups to small family businesses

8. Our crafts partners… 42 Suppliers

9. Craft partners by length of relationship…

10. Our approach to working with our partners… • Long-term relationships • Commitment to regular trade • Support & development • Product development • Quality & logistics support • Business & social development • Fair trading practices • Fair & mutually agreed pricing • Advances • Mutual evaluation

11. Our approach to working with our partners… • Ensure Traidcraft remains true to poverty mission and keeps interests of trading partners at the heart of the business • Set order targets and monitor regularity of trade • Work with other departments to ensure practices are fair • Key contact point for producers • Conduct fair trade evaluations & monitor improvements • Coordinate support & development plans • Gather and provide information on and to our partners • Visit our partners every 1 – 3 years

12. An Overview of the Process Our mission Collect feedback Our approach Evaluation

13. Managing fair trade compliance…. Traidcraft sells two kinds of fair trade products: • Those carrying the Fairtrade Mark • Those for which there are no Fairtrade Mark criteria – most non-food/crafts

14. Traidcraft’s Evaluation Process • Tool based on core fair trade principles (WFTO) • Covers basic ILO labour conventions + more developmental standards • Relationship based approach • Awareness, assurance & improvement • ‘Traffic light’ system • Two-way process • Involves local consultants wherever possible • Shared across European counterparts • Publish outcomes of partners assessment of us in our Social Accounts

15. Example – Trading Practices

16. Supplier Feedback Does Traidcraft… • Have policies & practices that enable our suppliers to work with marginalised workers or producer groups? • Provide regular information on Traidcraft, sales and development etc? • Pay prices that cover the cost of production, living wages & a reasonable level of profit? • Pay the agreed price at the agreed time • Provide pre-financing on request? • Provide adequate lead times for samples & orders? • Provide regular orders? • Provide clear specifications? • Have a clear & fair policy on rejects and cancellations? • Assist partners with plans to improve their businesses?

17. Main areas highlighted for improvement…. • Provision of regular information on Traidcraft, sales and development etc • Response: more systematic post season information provided to help producers understand how things are going at Traidcraft and specifically how their own products have performed and why. • Adequate lead times for samples and orders • Response: for a few suppliers (mainly African ones) who struggle with seasonal or export issues we order a few weeks earlier than our normal critical path to give them extra weeks for production and shipping • Clear and fair policy on rejects and cancellations • Response: Clearer written policy being developed and tested for fairness with some suppliers. Note also adopting penalty clause

18. Benefits of the evaluation process • Ensure we live up to our purchasing policy & claims • Customers can be confident in our fair trade standards • Helps producers identify areas for improvement and take their organisations forward • Provides us with deeper knowledge of producers and their realities of their context • Helps us identify areas for improvement in our own practices • Builds trust & relationships between the parties • Focuses our support & development activities

19. Support & Development • During the evaluation process we discuss the businesses needs & plans for development • For those partners who need most help we try to identify areas where Traidcraft might be able to assist • We work with partners to develop Producer Support & Development Plans

20. For more information on what we do and how we could work with you, please contact Alistair Leadbetter at alistairl@traidcraft.org or on +44 (0) 191 497 6548