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The Client: One of the world’s largest entertainment and media conglomerates

Overview

Every year, the client had the Herculean responsibility of conducting thousands of social compliance audits across their global vendors, licensees and facilities. Manual tools, spreadsheet-based processes, and insufficient visibility into factory compliance only made matters more challenging. MetricStream’s solution facilitated a better approach by integrating social compliance data in a single system for optimal control and visibility, while also streamlining and automating processes for improved efficiency. Meanwhile, dynamic reporting tools provided an in-depth view of social compliance issues and risks, helping the client mitigate them in a timely manner.

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Solution

In their search for a social compliance management solution, the client evaluated 3-4 top vendors, but eventually selected MetricStream. Their choice was largely determined by MetricStream’s expertise in social compliance solutions, as well as the scalability and flexibility of their technology, coupled with innovative capabilities such as AppStudio.

MetricStream developed a cloud-based social compliance management solution that would integrate almost 17 years of social compliance and audit data from the client’s systems. Today, the web-based solution scales across the global network of factories – from North America to Asia –helping the client capture factory information, categorize factories by risk, manage  factory declaration and authorization, conduct social compliance audits, and remediate any issues that arise.

The system is designed to scale up to manage additional factories, and to support dynamic business relationships. Graphical reports and dashboards provide comprehensive, real-time visibility into social compliance and audit data across factories, enabling executives to proactively identify and address areas of concern.

Below is a brief look at how the solution is helping the client:

Classification of Sourcing Countries by Risk

The MetricStream solution serves as an important reference for users when creating or renewing manufacturing relationships. It helps categorize factory locations or countries into high risk, medium risk, or low risk, depending on various parameters such as the country’s geo-political situation or level of corruption. Based on the risk, users can determine whether or not they should source products from a particular country. They can also view which countries require frequent audits of their factories.

Factory Information Management

The solution’s centralized repository maintains factory data, including contract related information, manufacturer profiles and contact details, factory audit status and history, and references to allegations made against the factory. The solution also maps each “parent” manufacturer to the factories they own in an umbrella-like structure, so that it’s easy for users to locate and understand the relationships between various sourcing entities.

Factory and Production Authorization Management

The client leverages the MetricStream solution to create and manage legal agreements which indicate whether or not a manufacturer is authorized to start producing or distributing the client’s branded products. The solution supports multiple types of authorizations such as product authorizations (which indicate whether a company is authorized to use a specific factory) and factory authorizations (which indicate if the company is authorized to produce in the declared factory). 

The solution streamlines the authorization process – right from generating the authorization form, to getting it filled in by manufacturer, to routing it for review and approval to the client organization. Once the form is signed, the manufacturers are allowed to start production.

Social Compliance Audits and Corrective Action Management

To determine if factories are meeting minimum compliance standards, the client conducts periodic social compliance audits on factories – either performed by the client’s auditors or by external audit firms. Both types of audits are supported by the MetricStream solution.

The solution enables a systematic and consistent approach to the process of scheduling an audit, assigning audit tasks (either to internal auditors or to the factory), conducting the audit, and routing the results for review and approval. Comprehensive audit data is captured by the solution -- including the details of the factory being audited, auditor profiles, audit assessment processes, audit results, and violations, if any.

If either the client audit or the third-party audit finds that a factory is not meeting social compliance standards, the solution helps communicate a corrective action plan to the factory, outlining the standards that they have violated, as well as the steps needed to rectify the issue. After three months, the solution enables a follow-up audit. If the factory has still not corrected the issue, its license is revoked.

The solution also helps identify and record zero tolerance violations such as bribery which prompt the client to immediately revoke the responsible factory’s product authorization.

Allegations Management

Any allegations that have been initiated against a manufacturer or factory can be managed and tracked in the MetricStream solution. The solution captures a wide range of details including the type of allegation, date, initiator of the allegation, and involvement of the client organization. It also helps create and maintain action plans to address the initiator’s demand, and tracks the timelines and progress of these actions in real time.

Reporting

The MetricStream solution standardizes social compliance reporting across global manufacturing facilities. It aggregates and rolls up data around social compliance risks, factory audits, issues, corrective actions, and allegations. Executives get a 360-degree, real-time view of the social compliance program across factories, and can easily drill down to view the finer details. Powerful reports and dashboards, combined with advanced analytics, help users slice and dice the data based on various parameters. Trend analyses reports help them stay in touch with the progress of social compliance programs at each factory.

Multi-Language Support

Since the client’s factories are spread across different geographies with varying language requirements, communication can sometimes be a challenge. The MetricStream solution provides the client support for up to 12 different languages. Emails that need to be sent out to manufacturers regarding corrective action plans or assignments are automatically translated into the manufacturer’s preferred language based on their location. 

Challenges

As one of the world’s most socially responsible brands, the client strives to foster a safe, healthy, and inclusive working environment in their manufacturing facilities through a comprehensive social compliance audit program. However, over time, it became increasingly challenging to manage the program, given that there were more than 20,000 factories across the world that had to be periodically audited for compliance with international labor standards, as well as the client’s internal code of conduct. Every year, the client performed over 15,000 social compliance audits based on multiple parameters, including health and safety, working hours, wages, benefits, women’s rights, and child labor. They also had to audit facilities for compliance with local labor laws, many of which varied from one country to the next.

The client’s in-house social compliance management system simply could not keep pace with these evolving compliance requirements, as well as anticipated business growth, and increasing factory numbers. The system did not have the ability to capture all the required information. Plus, it lacked dynamic reporting tools, and was costly to maintain.

Visibility was another key concern.  Without an effective mechanism to roll up social compliance and audit data in real time to the company headquarters, executives couldn’t get a complete picture of how effectively factories were complying with the required laws and standards.  

The client quickly realized the need for a more robust and scalable tool that would strengthen the efficiency of their social compliance and audit processes, and, more importantly, improve visibility into compliance risks and issues across their factories – because if, by chance, the client wasn’t able to identify and remediate an issue such as child labor, or discrimination, or unsafe working conditions, it could quickly spiral into larger problems with far-reaching consequences for the company’s brand and reputation.

Why the Company Selected MetricStream?

The client chose MetricStream for the following reasons:

  • MetricStream has extensive experience in helping companies strengthen their social compliance programs in line with the latest standards and guidelines
  • The solution’s underlying GRC platform can quickly scale up to support growing social compliance requirements, as well as large and complex organizations and supply chains extending across the globe.
  • The MetricStream Social Compliance Management Solution is used by some of the biggest brands worldwide
  • Innovative features such as AppStudio enable high degree of configuration to meet the client’s unique requirements
  • The extensibility of the platform will allow the client to add on other MetricStream apps such as the vendor risk management app, or the Environment, Health, and Safety (EHS) management app

Benefits

  • A Holistic Approach to Manage 15,000+ Audits
    Instead of dealing with multiple siloed social compliance systems and bulky spreadsheets, the client now has a single, integrated solution to manage their social compliance and audit activities across 20,000+ factories and 7,000+ licensees and vendors worldwide.
  • Improved Visibility into Factory Social Compliance
    At the click of a button, executives get a birds-eye of the audit results, issues, trends, risks, and metrics associated with factories across the globe. This enables them to make informed decisions around responsible sourcing, and minimize social compliance issues.
  • Greater Process Efficiency
    Multiple social compliance and audit processes have been streamlined to minimize redundancies and inefficiencies. Workflows have been configured to support multiple types of audits including those conducted by the client’s auditors as well as those conducted by third-party auditors on a factory. Auditors can now focus their energies less on cumbersome paperwork, and more on analysis and decision-making.
  • Lower Total Cost of Ownership
    From maintaining an expensive in-house system, the client has moved to MetricStream’s cost-efficient cloud-based solution, deployed over the state-of-the-art and highly secure MetricStream GRC Cloud. Apart from lowering the cost of ownership, the cloud-based solution also delivers high performance and scalability, enabling the client to incorporate more than 17 years of data into a single system.

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