Takko Performance Check 2016
Takko met most FWF’s management system requirements to improve working conditions. Takko monitored 93% of its total purchasing volume, which is above the 90% required of brands in 3+ years of membership. Combined with a benchmarking score of 58, this places Takko in the ‘Good’ category.
With a process of consolidation of the supplier base, it is noted that the total FOB volume from suppliers with which Takko enjoys a long-terms business relation exceeding five years has increased slightly to 51%. Takko is an important buyer (leverage above 10%) for suppliers that account for 65% of Takko’s total purchasing volume. While total number of Takko suppliers further decreased during the previous financial year, Takko still has a large number of suppliers at which it has very low leverage (less than 2 %) in the tail of its supply base. Takko is recommended to continue efforts to reduce this group.
FWF compared the quality of Takko audit reports with FWF audits at the same locations in the same period. It was found that generally the reports are of good quality, but often lack specific information regarding living wages (focus is on legal minimum wage) and information regarding excessive overtime is often not in line with the FWF audits. It is recommended to arrange a training of Takko compliance staff by FWF and arrange a process of intervision, with FWF audit supervisor joining some of the Takko audits. Takko is also recommended to arrange for off-site worker interviews as an important source of information prior to on-site audit visits.
Thanks to its local offices in South East Asia, Takko is frequently auditing its suppliers and is able to actively remediate complaints and audit findings. However, in high-risk countries where Takko has no local presence (including Turkey, Pakistan and Myanmar), monitoring and follow-up is less strong.
Generally speaking, the use of agents in sourcing decisions often reduces leverage of the brand to directly address labour conditions. Long term business relations and adequate attention to labour conditions may not always be a determining factor in the sourcing decisions of agents. Takko is mitigating this risk by working very closely with its agents. Agents are only allowed to place orders at a pool of pre-approved suppliers. New suppliers need to be approved first and need to have either a BSCI or Takko audit. Depending on the results of these audits, Takko will approve new suppliers. Local Takko teams are following up on quality or social compliance directly and regularly with the factory, which means it has a good understanding of the production locations and can exercise leverage to work effectively on remediation.
In its monitoring, Takko needs to pay more attention to address excessive overtime and it needs to develop a pricing policy where the company staff knows that their prices are allowing for the payment of at least legal minimum wages in production countries, which means labour costs per product should be known. Finally, it is recommended to involve more suppliers in the WEP programme.Download