VAUDE has a great interest in long-term relationships with producers. As a rule, we work directly with our producers and try to transact as little as possible over agencies. Frequently changing producers to obtain more favorable prices doesn’t match with our company philosophy – read more at VAUDE Mission Statement. For VAUDE, it is important that the producers have an understanding of our VAUDE values and quality standards. We achieve this through many years of collaboration based on mutual trust. On this basis, open and constructive cooperation is created.
With our longstanding partnership and year-round VAUDE production, for example, we could reorganize the Quality Control System in our production facility in Myanmar and a longstanding partner in Vietnam. Normally our Asian Quality Control Team travels to all production facilities and approves the orders. The employees in Myanmar were trained on our system by our team in 2014. Since that time, Quality Control under our standards has been carried out by the production site itself. The implementation of the Quality Control System in three production facilities in Vietnam is not yet complete, but will be by the end of this year.
This is only possible in production facilities that produce for us throughout the year, including during the low season. This is a significant improvement and a step forward in our cooperation.
When discrepancies are detected in FWF audits, we try to work with our producers to take remedial action. We use a Corrective Action Plan and develop a timetable that specifies a date for resolving the discrepancies. Some measures are very complex and time-consuming. In these cases we give our producers the time required. If we determine that the agreed upon measures are proving inadequate or are not being implemented, there are renewed talks. If the producer shows no willingness to resolve the discrepancies, then a long-term cooperation is not possible. As a last resort, we consider severing the relationship. Before we opt for this, however, we do everything we can to support the producers in implementing improvements. During the reporting period, we had no case in which severance was necessary.
With long-term and reliable planning, we have the opportunity to make a positive effect on the working conditions at the production sites. Our producers can rely on us; we plan our collections early and in detail in order to give them planning security. This can help them to avoid excessive overtime, for example. Once we have placed an order, there are no modifications or cancellations from our side.
VAUDE develops and produces two collections annually: a Summer Collection and a Winter Collection. An exception is Packs' n Bags, for which there are four collections annually.
Lead times play an important role in industrial production. Our planning process is therefore of the utmost importance. With our internal planning at VAUDE, we can make an early start of production, and thereby also avoid production peaks that often entail excessive working hours.
We require early, detailed and binding planning of quantities from our sales department. The more accurate our forecasts, the better the producer can plan and the less overtime is incurred during production.
Prices are negotiated and set at an early stage with the producers. This is usually done by means of cost breakdowns. The cost breakdown is a detailed list by the producers of all materials used and their associated costs, and all other relevant costs incurred in the manufacture of a product.
After each season, the producers are analyzed in terms of meeting deadlines, delivery, quality, quantity, working conditions, etc., and then measures for improvement are discussed.
Our internal planning process and our purchasing practices are reviewed and evaluated by the FWF at the annual Brand Performance Check. More at Leader Status FWF This point is covered under the management requirement VAUDE's Sourcing Practice. In annual producer meetings, the cooperation is jointly evaluated and our procurement practices are also discussed.
We are constantly working on our own planning and ordering processes. We want to create the conditions to help our production partners to plan the required capacity of manpower and machinery at an early stage. In this way, we ensure timely delivery and make sure that we do not cause excessive working hours for employees.
We are striving to consolidate our collaborations with our producers. We have two objectives. On the one hand, we want to achieve year-round utilization; on the other hand, it is important for us to increase the volume of orders with established partners. This has the following advantages: firstly, we can become a predictable, secure customer for the producer. Secondly, we have the opportunity to compensate for small production amounts with larger orders. This is positive for both sides: the producer increases its efficiency while VAUDE gains more influence on the production partners and has the ability to exercise greater pressure when improvement is needed. Overall, the collaboration is strengthened in this way.