Celebrating 10 Years at BM&FBOVESPA
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SUPPLIER MANAGEMENT RESALE (GFR)
G4-2 G4-10 G4-HR5 G4-HR6 • G4-HR10
Resale suppliers are responsible for the products sold in Renner and Youcom stores and are
considered the main critical point of the Company's supply chain.
On November 11, 2014, Lojas Renner S.A. was notified by the Ministry of
Labor and Employment (MTE) on non-compliances related to the use of
immigrant labor in its supply chain. The situations identified by the MTE
indicated that the Letícia Paniágua Verdugues Sewing Factory, contracted by
two of Lojas Renner's resale suppliers, have failed to comply with labor laws.
On this occasion, Lojas Renner S.A. stood beside the MTE to ensure
compliance with labor laws by its suppliers. The Company, on the same day,
November 11, 2014, notified its suppliers for the immediate regularization of
their employees' work situation identified by the MTE.
From this initiative, the Letícia Paniágua Verdugues Factory met with the MTE,
accompanied by the two mentioned suppliers, terminated all employment
contracts, made severance payments and released the FGTS of its employees.
Lojas Renner's suppliers terminated the contract with the sewing factory -
Letícia Paniágua Verdugues - and signed a Conduct Adjustment Agreement
with the Public Ministry of Labor, in order to ensure that the employees will
be incorporated into its operations and that they will be indemnified at the
amounts determined by the MTE.
In August 2015, the MTE hold Lojas Renner responsible for the situation
described above, characterized as working conditions similar to slavery.
Faced with this decision, Lojas Renner began a judicial dispute and obtained
an injunction with the Superior Labor Court, in November 2015, which
determined that its name would not appear in the MTE's list of companies
that have used directly or indirectly labor force in such working conditions.
Renner
All national suppliers of clothing,
accessories and footwear are
certified by ABVTEX (Brazilian
Association of Textile Retail), which
assesses their adherence to good
corporate practices regarding social
responsibility and the environment.
In 2015, the Company achieved
the certification by ABVTEX of
100%
of its supply chain of clothing,
footwear and accessories,
totaling 256 certified suppliers
(164 sewing and 92 footwear and
accessories) and 1,162 certified
subcontractors (1,086 sewing and
76 footwear and accessories).
RESALE SUPPLIER MANAGEMENT STRUCTURE
In order to minimize the risks involved in its supply chain, the Company
restructured its resale supplier management (companies with which Renner
maintains business relationship of buying/selling products), by dividing the
department into two areas: the Resale Supplier Development (GFR) and the
Supplier Compliance Management (GCF).
The Supplier Development area is composed of a manager and a technical
team consisting of one analyst and one assistant, responsible for generating
performance indicators and data analysis, and three analysts, responsible for
the suppliers training, awareness campaigns and development programs. The
Compliance area is composed of a manager, a team of nine external auditors
allocated in SP, SC and RS, responsible for conducting audits in this supply
chain, two analysts and two internal assistants. The auditor is responsible for
auditing (in-person technical visits) and the analysts and assistants program,
monitor and support the work performed by the external auditors. In 2015,
3,129 in-person technical and follow-up visits were conducted, 177% higher
than number of visits in 2014.
Learn more about the relationship process with national resale suppliers
below, which is conducted by the Supplier Compliance and Development
areas and based on the following pillars: selection, monitoring and control
and development.
92
new national resale suppliers - of
clothing, accessories, footwear, beauty
(Alchemia) and third brands - were registered
in the year, of which 100% has been audited
by the Company to assess issues such as
respect for human rights, labor practices
and other aspects related to sustainability.
International suppliers are only audited on
demand, in cases of complaints on social
issues, and, if non-compliances found, the
supplier is de-accredited.
In 2015, Lojas Renner
maintained business
relations with
456
63%
of the total
contracted resale suppliers
- those that manufacture
products sold in stores - are
national suppliers, and 37%
are international suppliers, the
same level as the previous year.
active resale suppliers -
Brazilian and foreign-,
totaling an expense of R$
2.4 billion.
Conduction of
3,129
in-person technical
and follow-up visits.
RELATIONSHIP
PROCESS WITH
NATIONAL RESALE
SUPPLIERS:
SELECTION
1 SUPPLIERS APPROVAL
In 2015, the Supplier Compliance area was
made responsible for the Supplier Approval
process, making the selection of new partners
even more rigid. This change has brought the
full implementation of the approval process,
which is the preliminary assessment of
suppliers and their contractors. To this end,
interviews, documentary assessment and
technical visits are held prior to the start of
a business relationship with a new supplier
or its new contractor for the production of
Renner's pieces. In this new context, the
Approval, which had the average term time of
150 days, was reduced to 80 days.
2 WELCOME
The Resale Supplier Development area
is responsible for the communication
process with the resale suppliers, either
through holding events, training and/or
corporate communications, seeking to
answer questions and guide the suppliers
towards Renner's requirements.
In this regard, the area has implemented
the "Welcome" program in 2015, focusing
on the integration of new suppliers to
Renner's processes. This program seeks
to educate new suppliers about Renner's
way of being and acting, contemplating
integration with all interface areas during
the supply of products.
MONITORING AND CONTROL
1 TECHNICAL VISITS
The Audit Management process of the Resale Supplier Management
was restructured to intensify the monitoring and control of risks
regarding social responsibility in the supply chain of resale products,
and became the Supplier Compliance Management area.
As a way of monitoring the chain, in 2015, the Compliance area
elaborated a system of technical visits for the compliance and
traceability of orders, which allows a quicker and more effective
control of results.
These are assessed by the internal team and, if non-compliances are
identified, the supplier is required to perform an action plan with pre-
established resolution terms.
Production license: the License process was managed by the
Purchasing Department and is now controlled simultaneously
by the Suppliers Compliance Management and the Operations,
Planning and Projects (OPP) area, focusing on activities such as
communication, training and orientation between Renner and the
supplier, concerning the sending, receiving and authorization of
Production Licenses. They are also responsible for the verification
of certificates regularization during compliance audits, intensifying
Renner's production license control.
Currently, audits of international suppliers are performed on demand,
in cases of allegations of social issues, which are investigated and, if
the non-compliances are identified, the supplier is de-accredited.
2 IDGF INDICATOR
In 2015, the Resale Supplier Development area restructured
the IDGF (Global Development Index Supplier) and began
the analyzes segmentation process by production chains.
This restructuring involved the areas of interface with the
supplier within the Company, seeking greater adherence of
the index to its reality.
The restructuring of the IDGF indicator included the
revision of the social index - in accordance with the
evaluation of the Compliance area's technical visits within
the chain of each supplier - as well as the addition of the
financial index (financial health) as an IDGF's evaluation
item. In addition to these changes, the indicator's Logistic
and Commercial indexes were also reviewed.
All of these changes on the indicator were conducted in
2015, but are now implemented and measured in 2016.
DEVELOPMENT
1 RISK MONITORING PROGRAM
The Supplier Risk Monitoring Program was developed
in 2015, and 30 strategic suppliers were selected to
received training, guided technical visits and awareness
meetings with the goal of making their internal
compliances processes similar to Renner's processes,
reducing the frequency of non-compliances found in
each supplier's chain.
Respect for the legislation: the Supplier Compliance
area also strongly acts on training and awareness of
resale suppliers of clothing, footwear and accessories
in relation to compliance with labor legislation and
health and safety at work through guiding events at the
Company's administrative headquarters for all resale
suppliers and sending of periodic communication
materials on the issues.
2 CONTINUOUS IMPROVEMENT
PROGRAM (PMC)
Lean manufacturing: the Resale Supplier
Development area started the Lean Manufacturing
intervention process, an initiative for the
development of resale suppliers which seeks to
raise awareness of front suppliers to issues such
as: waste disposal, increasing productivity and
reducing lead time in their operations, always
focusing on the development of the supplier.
In 2015, 35 strategic suppliers participated in this
process, with theoretical and practical activities,
as well as being assisted in the application of lean
tools within their production processes.
In the same year, in order to share best practices,
successful case studies of these interventions
were presented in a workshop with Renner's Key
suppliers, and realized a training about the "lean"
concept.
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