The year 2008 marked the 60th anniversary of PUMA and 10 years of PUMA.Safe. Since 2007, PUMA’s supply chain has grown to accommodate expected market demand and special projects, particularly those that were related to the Beijing Olympics and the FIFA World Cup, across all product classifications. Discounting all dropped factories, PUMA’s global tier 1 supply base grew by an average of 11%. Supply base growth was significant in Asia for both licensees (15%) and our own sourcing organization World Cat (17%). The supply base for World Cat in EMEA/Americas and licensees contracted by 5%. The global supply base, including all audited Tier 2-3 suppliers encompasses approximately 300.000 employees.

In 2007, PUMA.Safe launched a new modified Rating System that introduced the B+ and B- grades, and more frequent monitoring, and removed the original grade of B. Splitting the B grade to a low and high B was a tool to indicate suppliers that were only interested in short-term corrective actions vs. those that were implementing substantial and sustainable corrective actions to issues found. Suppliers rated with a B- were re-audited within a shorter period of time, which resulted in more frequent re-audits within the calendar year and the quicker identification of critical issues.

In addition, PUMA made a long-term commitment in 2008 to map out the lower tiers of its supply chain and strengthen monitoring at these levels. Until 2010, PUMA has committed to undertake direct auditing of a percentage of facilities in lower tiers of the supply chain. Read more

PUMA’s commitment to improving conditions in the workplace goes beyond auditing and brand collaboration. We realize that finding solutions and making improvements requires identifying and addressing the problem, rather than merely treating the symptoms. We go to the heart of production to address factory issues and problems, making capacity-building a top priority. Our puma.safe capacity building initiatives and programs alert management to operational weak points, then offering training programs that will enable them to independently implement the necessary improvements.

In 2005, PUMA initiated its first capacity building program. Vietnam, China, Thailand, Romania and Bulgaria were the first countries where suppliers participated in our capacity building projects. These initiatives involve raising awareness of general social standards, compliance to fair labor practices such as reasonable work hours, open dialogue about freedom of association, implementing and improving human resource management systems, and employee training on the PUMA Code of Conduct and local labor laws. Other capacity building projects were implemented the following year in Turkey and El Salvador addressing similar topics while also introducing trainings on wage compensation and gender equality. Another capacity-building program—the suppliers’ training on Restricted Substances List testing—was started in 2006 and ongoing in all countries.

The latest programs are run in China, Vietnam, Turkey and South Africa.

Since 2006, PUMA has been participating in the Multi-brand Human Resources Management Systems (HRMS) Project, which aims at improving HR structures and processes at an operational level in the suppliers’ factories to enhance manpower participation and productivity—which will ultimately lead to an increased capability of the suppliers to comply with the brands’ Codes of Conduct.

Deciding to implement HRMS projects in a number of their factories came from PUMA’s and other multi-national companies’ realization that a lack of proper management systems at the production facilities of many contracted manufacturers has traditionally been the reason for many issues of non-compliance and inefficiency. Ineffective management of human resources, inconsistent compliance with the companies’ labor, health and safety, as well as their environmental standards, and limited implementation of high performance work systems and production processes were all traced back to an absence of efficient management systems.

Through classroom-based consultant and peer learning, project assignments and inter-department committees within the factories, these various learning methodologies help participating factories improve their HR practices through instituting systemic improvements in internal management systems. Participating factories undergo one year of training on various HR topics such as recruitment, HR planning, compensation design, etc. Currently being conducted in China and Vietnam, PUMA is committed to systematically introducing HRMS requirements with all key suppliers, partnering with other brands and organizing country projects together.

The PUMA.Safe team has established hotlines for PUMA factory workers which provide an anonymous reporting mechanism, allowing workers to call in and report any issues or problems they face at their workplaces. The hotline number is given to employees after all factory audits and visits by members of the puma.safe team. The workers are free to contact our team and ask for advice on labor issues or enquire about their rights at the workplace. We are happy to report that workers have been using the hotline to report complaints about a number of misbehaviors and violations of our code of conduct.

If you know of any violations or would like to give us feedback or suggestions, please email us at sustain@puma.com.

In spring 2008, China Labor Watch (CLW)—a New York based independent non-profit organization which realizes and defends labor rights in China—issued two reports which criticized workplace conditions in the production facilities of two key PUMA suppliers. Allegations concerned, among other issues, were excessive overtime hours, minor quality of food in the workers’ canteen and inadequate communication within the factory.

PUMA took the allegations very seriously and launched investigations throughout 2008, looking into the claims and problems reported in the following months. We found out that many allegations were either exaggerated by the workers or simply untrue. However, some of the issues raised were valid and we invited representatives of China Labor Watch to visit our factories again and engage in discussions with the factory management about how the issues could be remediated.

The discussions brought to light that communication between workers and management was inefficient. If workers had complaints or problems, most of them did not know how to get help, although the factory had many channels for grievance reporting or improvement suggestions. We agreed with China Labor Watch to improve the communication between the workers and the factory management through training programs. This one-year training project commenced in January 2009 and aims at making workers familiar with complaint procedures, such as the PUMA Hotline and complaint boxes.

For more about China Labor Watch, click here.