Takko Performance Check 2017

Takko Holding GmbH Performance Check 2017

Takko met most FWF’s management system requirements to improve working conditions. Takko monitored 92% of its total purchasing volume, which is well above the 90% required of brands in 3+ years of membership. Combined with a benchmarking score of 67, 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-term business relation exceeding five years has increased from 51% to 58%. Takko is an important buyer (leverage above 10%) for suppliers that account for 78% (up from 72%) of Takko’s total purchasing volume. As Takko has a large number of factories/production locations (around 330), only a few (5 out of 330) account for more than 2% of Takko’s total purchasing volume. In fact, 270 of Takko’s suppliers account for less than 0.5% of Takko’s total FOB volume.

Takko’s audit reports are generally of good quality, but often lack specific information, e.g. findings on excessive overtime are often not in line with the FWF audits. This will continue to require attention. Takko should arrange a training of Takko compliance staff by FWF and arrange a process of intervision, with FWF audit supervisors joining some of the Takko audits. Takko is also advised 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 auditors (including Turkey, Pakistan and Myanmar), monitoring and follow-up is less strong.

Takko has strong system for due dilligence in place. Agents are only allowed to place orders at a pool of pre-approved suppliers. New suppliers need to be approved first by the CSR team and need to have either a recent and complete third-party audit 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 continue to enroll more suppliers in the WEP programme.

Score: 67 Percentage under monitoring: 92% Category: Good

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