Overview
We place great importance on the selection of our suppliers and, where appropriate, will visit
manufacturing sources to verify that effective quality procedures are in place and that supply chain costs are minimised. We are always striving for improvement and we believe it is important that our suppliers are responsive to feedback from our customers and store colleagues. Halfords recognises that the development of close supplier partnerships is essential for the ongoing provision of an innovative and value-for money product offer.
Suppliers
Halfords Asia has a Sourcing Code of Conduct (“the Code”), which can be viewed on the Company’s
website (halfordscompany.com). This is sent to potential new suppliers within the Far East, as part of
the Supplier Questionnaire, before orders are placed with the supplier. Compliance with the Code is
independently audited. The response to the questionnaire is reviewed and, if the supplier does not
provide an acceptable alternative assessment report, an audit by an independent auditor such as Bureau
Veritas is arranged at the supplier’s expense.
We recognise that this Code must be developed to reflect practical experience and changing
circumstances. We will continue to develop and share best practice with our suppliers, other retailers, non-government organisations and Government.
Halfords will only trade with those companies who fully comply with our policy or those taking verifiable steps towards complying with the policy. In the event of any failure to comply, we reserve the right to end the business relationship and cancel outstanding orders. We do, however, recognise that withdrawal of our business in the event of non-compliance may cause severe hardship to those employed. We aim, therefore, to work with our suppliers, to achieve compliance and carefully review progress made before considering severing the relationship.
Following the independent audit of the Code any supplier that receives a score of D or lower is required
to issue a corrective action plan. The corrective action plan is reviewed by Halfords Asia Quality Department, and if approved, a date is set for follow-up with the supplier. Depending on the type of non-compliance this follow-up may include a specific factory visit, or be included at the next planned visit. The timescales will, gain, depend on the nature of the non-compliance.
In 2007, audits were performed on suppliers providing 77% of our Far East purchases. Of these audits, three required corrective action plans to be formulated due to minor shortcomings in one of health and safety or employment conditions. During 2007, the Group set up a further 45 new suppliers which, in line with our Code of Conduct, will be fully audited a maximum of six months after set-up, with the intention of auditing prior to supply.
The Code of Conduct assessment results and progress on any corrective action plans are issued in a monthly report and reviewed between Halfords Asia and UK Head Office senior management.
Ethical trading
The Code states our policy on legislation, child labour, conditions of employment, wages and benefits, health and safety and environmental policy.
We undertake all reasonable and practical steps, including factory, warehouse and tied accommodation
inspections and audits, to ensure that our standards are being implemented throughout the businesses of our suppliers and that local legislation and regulations are complied with. We will assess any instances of non-compliance on a case-by-case basis and will then tailor remedial action appropriately. We will only trade with those who fully comply with this policy or those who are taking verifiable steps towards compliance.
We oppose the exploitation of children and young people and, in addition to national employment laws,
we require of our suppliers that children under the age of 14 years, or those below the age for completion of compulsory schooling, must not be employed full-time.
We oppose the exploitation of workers and we will not tolerate forced labour, or labour which involves
physical, verbal or psychological harassment, or intimidation of any kind. We will not permit the
exploitation of, or discrimination against, any vulnerable group. Workers must have the right to form
and join organisations to facilitate freedom of association and collective bargaining and all workers
must have written employment details, which must pay due regard to the welfare of individuals. We support fair and reasonable rewards for workers. Wages should reflect local norms and should meet or exceed any legal minimum wage levels. Wages must be paid in cash, or by cheque or bank transfers. Workers must receive full written details of their pay. While local and cultural differences will be observed, workers must not be expected to work in excess of 60 hours per week on a regular basis, including overtime. Any overtime must be voluntary. Workers will be entitled to at least one day off in seven. Individual workers have the right to choose not to take their days off should they so wish.
We require that appropriate health and safety training, including training in fire safety, be provided for all
people in all working areas. All activities must be carried out under conditions that have proper and
adequate regard for the health and safety of those involved. Management arrangements must be in place
to detect, avoid and respond to potential threats to health and safety.
We promote our own business objectives with those in our supply chain to minimise the environmental impact of our operations and also encourage the consideration of social issues in business.
Supply chain transportation
Many of the products delivered into our national distribution centres (“NDCs”) are imported in
containers via sea deliveries for onward road transportation, although some are delivered via air
freight. We have worked hard during the year to reduce the number of containers transferred from ports via road and in 2007/08 40.7% of all containers delivered were moved by rail to a hub in the Midlands.
The air freighting of products from suppliers is only used in cases of extreme urgency, and in 2008, through improved supply planning and forecasting, volumes shipped in this way reduced from 187,043 kg in 2007 to 67,641 kg in 2008, a reduction of 64%.