VAUDE has a great interest in long-term relationships with producers. Frequently changing producers to obtain more favorable prices doesn’t correspond with our company philosophy. 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. This foundation creates the conditions for open, constructive collaboration that helps us to shape and improve sustainable processes at the production sites.
To date, we have had a very good process that has given our producers planning security. In 2016 we again optimized our internal planning:
We require early, detailed and binding planning of quantities from our sales department. The more accurate our volume forecasts, the better the producer can plan and the less overtime is incurred during production.
Prices are negotiated and established very early with the producer. This usually happens during the product development phase based on cost breakdowns. In the cost break down, the producer records exactly what materials are used, what they cost, and other relevant costs incurred for product manufacturing.
After each season, we evaluate the producers' data with regard to adherence to deadlines, delivery, quality, quantity, working conditions, etc. and then discuss any improvement measures that may prove necessary.
Some of your VAUDE products will continue to be manufactured right here at our Manufaktur production facility at the company headquarters in Tettnang-Obereisenbach as well as elsewhere in Europe. However, the majority of all outdoor products, however, are made in Asia.
VAUDE worked with eleven producers in non-risk countries in the period under review. They accounted for 11.43 % of the total expenditure for our products. Eight percent were products made here in southern Germany at our Manufaktur production facility.
However, the majority of our products are manufactured by external contractors and distributed by VAUDE. VAUDE traditionally maintains business relationships based on partnership and always works directly with all producers. The majority of our producers' production facilities are located in China and Vietnam.
In high risk countries, the likelihood that labor standards or laws are violated is greater than in non-risk countries. In these countries, institutions (such as trade unions, employee organizations, labor legislation, supervision systems) that guarantee compliance with labor standards either don't exist or don't function well. The FWF categorizes all Asian countries as well as Bulgaria and Romania as high risk countries.
VAUDE has achieved the FWF’s Leader Status. The FWF requires that its members have at least 90 % of its factories audited. At VAUDE it is important it to have complete transparency. Therefore, all producers in high risk countries have been audited. VAUDE works with the producers on action plans for implementing corrections.
Producers in non-risk countries are not audited because the risks are much lower. Nevertheless, our employees visit them regularly. In 2016, our CSR team visited all local producers with an emphasis on social standards. In an industry-wide comparison, these producers are relatively close to our main business site in Tettnang-Obereisenbach and are therefore referred to as local suppliers.