Assessment Process

Pre-Production Assessment

Before we engage in a new partnership, our vendors sign our Vendor Code of Ethics (VCoE) Certificate of Compliance and we conduct a full facility assessment. If all zero-tolerance criteria and minimum requirements are met, we begin a business relationship together. If any violations are found during the assessment, a corrective and preventive action (CAPA) plan is put in place. This includes agreed-upon solutions, a timeframe for implementation, and key responsibilities.

Assessment Activities

During assessments, we meet with facility management, tour the site (including dormitories and canteens, if applicable), review documents, and interview employees and workers at all levels of the organization, including union representation. Our VCoE assessment tool is what guides our assessments, which can last a few days, depending on the facility. They end with a closing meeting with facility management where our team presents the findings, ratings, and a mutually agreed-upon timeframe for implementation of an action plan, if necessary.

Continuous Improvement

Our zero-tolerance policies need to be followed at all times, without exception. We know that most vendors will not achieve 100% rating across all other assessment criteria and in the spirit of continuous improvement, our partners develop Corrective and Preventative Action plans (CAPAs) with our support that blend training, consulting, and coaching to help them meet our standards. The CAPAs include root cause analysis, agreed-upon solutions, a timeframe for implementation and key responsibilities. This helps create change and rewards vendors who improve conditions at their facilities.

Purchasing Practices

Our rating scale feeds into lululemon’s general sourcing scorecard and is based on our assessment checklist. Vendors are classified according to assessment performance. Our approach is to achieve change through supplier engagement and incentives. In cases where a vendor is not making improvements, we’ll reduce our business or move our business elsewhere as a last resort. When vendor partners perform well, we consider this score and may increase business when other sourcing criteria are also being met.

Ongoing Assessments and Follow-Up Visits

Our policy is to reassess a facility’s performance on-site at least every 18 months with all facilities and at least annually with strategic vendors, subject to vendor performance.