IDFL Supply Chain Traceability Audit FAQ

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1 IDFL Supply Chain Traceability Audit FAQ How is IDFL Traceability Audit Department set up? Regional Traceability Managers Region Manager Europe Matt Lieber China/Taiwan Jenson Sun Taiwan/Reports to China Joey Chow/ Reports to Jenson Sun USA/Global Coordinator Josh Jarman What is the turnaround time for an IDFL Traceability Audit? The turnaround time for a Traceability Audit is dependent upon these 2 main factors: Length/complexity of supply chain Cooperation of suppliers being audited The standard time frame from beginning to completion of a Traceability audit is 3 months What is the Traceability Audit Pricing? IDFL charges 1000 USD base which includes the reporting fees, start-up fees, etc., to be paid after the client visit and the agreement is signed, but before the first site visit. 500 USD per/man day Incidentals incurred by the IDFL auditor: Travel, lodging, Food, etc. What can be audited during a Traceability audit? Please reference the Supply Chain Detail Overview What is the validity of an IDFL Traceability Audit IDFL audits are reported as accurate as of the day they are issued and valid for 1 year. Any changes in the supply chain (added suppliers) would nullify the report until the additional source could be evaluated. What is the renewal/update process? Clients can update their audit on an annual basis. IDFL will inform the client when the original audit is set to expire. IDFL will then verify the previously audited supply chain. If the supply chain is unchanged IDFL will extend the validity date of the original audit report. If the supply chain has changed, IDFL will audit the changes to ensure compliance. Every 3 years a new audit should be performed. How can I set up an IDFL Traceability Audit? Contact any IDFL office for the Traceability Audit Introduction Info Packet and Form Packet. Someone from the IDFL Traceability Audit team will then contact you to discuss the Traceability Audits in more detail.

2 IDFL Audit Services Introduction to IDFL Audits In the down and feather industry, the sourcing of products leads to some of the following questions: Where do down and feather materials come from? How are down and feathers collected from the birds? How do the birds live and how are they treated? How are down and feather products manufactured? What is the process for ensuring the quality and cleanliness of down and feather fill material and finished products? Are proper testing methods being implemented? The path from a farm to the retail store can involve many steps and many parties. As a result, IDFL offers audits to producers, buyers and retailers who want to know more about their raw materials and finished products. IDFL has the expertise to help buyers ensure that the quality and origin of raw materials meets client specifications. Our audit topics cover everything from supply chain traceability to internal factory processes. Audit Topics Supply Chain Audit To help increase transparency of a company s supply chain, IDFL offers a variety of audit options. These are outlined in the following table: Topic Scope Option Risk Assessment for Live-Plucking Traceability Consultation Supplier Verification EDFA Compliance ( Code of Conduct and Traceability Standard ) Geographic Origin of Down and Feathers Purity of Duck or Goose Material Evaluation of Bird Husbandry Comprehensive Multi-Leg Single-Leg Product Specific Annual Audit Update IDFL Completes All Work IDFL Verifies Client Internal Audit Certified Laboratory: IDFB EDFA DPSC Member: AATCC ADFC ASTM CFDIA EDFA IABFLO IDFL IDFL EUROPE IDFL ASIA Salt Lake City, Utah Frauenfeld, Switzerland Hangzhou & Taipei Page 2

3 IDFL Audit Services Laboratory Evaluation and Audit Many factories have internal laboratories to test and assess the quality of the down and feathers they are processing or filling into products. Unfortunately, not all of these internal labs have proper equipment, trained personnel or good laboratory practices. IDFL laboratory audits can include, but are not limited to: General Laboratory Conditions Adherence to Generally Accepted Laboratory Practices Adherence to Official Testing Methods Skill Level of Laboratory Technicians Factory Audit To help improve the long term quality of products IDFL can evaluate the general condition and cleanliness of a factory. IDFL can also evaluate the flow of the materials in the factory to identify potential risks and problems. IDFL will work with factories to correct any deficiencies. These audits can include, but are not limited to: Down and Feather Processing Capabilities Cleanliness Material Flow & Separation Working Conditions Sewing Process New Supplier Evaluation Adherence to Specific Guidelines, Codex or Association Deliverables Upon completion of the audit, IDFL will issue a final report outlining the findings of the elected audit. IDFL will also provide an E-book and hardcopy book containing detailed site visit reports, photos, self-declaration statements, receipts, and general audit educational tools all relevant to the specific audit. Finally, IDFL will also provide the client with an audit certificate verifying the completion of the audit. Completion Times and Price Quotations An estimate of time and cost will typically be quoted after the first visit. A final cost will be determined after the audit is complete and will be included in the final invoice along with expenses incurred during the audit process. IDFL will require payment from whoever signs the Audit Agreement. Other payment options are also available. Please discuss with IDFL auditing staff or accounting personnel. Certified Laboratory: IDFB EDFA DPSC Member: AATCC ADFC ASTM CFDIA EDFA IABFLO IDFL IDFL EUROPE IDFL ASIA Salt Lake City, Utah Frauenfeld, Switzerland Hangzhou & Taipei Page 3

4 Introduction In the down and feather industry, the sourcing of products leads to some of the following questions and more: Where do down and feather materials come from? How are down and feathers collected from the birds? How do the birds live and how are they treated? As an industry leader in the quality assurance of filled textile products, IDFL offers supply chain audits to help producers, buyers and retailers ensure that the quality, pre-treatment and origin of raw and finished materials meet the desired specifications. IDFL believes that by assisting companies complete regular audits it can support ethical business practices within the down and feather industry and subsequently help maintain its long-term future as a fair market. Most importantly, it is IDFL s goal to help your company make sure it s receiving the quality of goods and materials it expects. What an IDFL Audit Will Include A down and feather supply chain can be very advanced and involve many steps and many parties. The IDFL Audit covers this range by making individual on-site visits to each supplier as necessary in the supply chain. In each visit, IDFL will meet with the management and personnel, gather critical information and documentation as well as directly examine site conditions, processes and systems. The steps of an IDFL audit are as follows: To begin the process, IDFL will meet and discuss the unique details of the particular audit with the requesting customer. The requesting customer will then sign the IDFL Audit Agreement. The requesting customer will then need to provide IDFL with a comprehensive supplier list and contact information. Lastly, IDFL will request each customer s help in providing advance notice to all necessary suppliers of an IDFL visit in the near future for the requested audit. IDFL will then visit each supplier, observe site conditions and systems and collect the following from the supplier: All purchase orders for both the previous and current year. Volumes of down purchased from each supplier. Slaughterhouse certificates, veterinarian certificates and other documentation regarding the removal of down and feathers from the birds. The collection of this information in addition to supplier visits will allow IDFL to determine the ability of a specific supplier to maintain a transparent supply chain. Ultimately, this will reinforce an end goal of complete traceability. If the tracking system for a certain supplier is insufficient, IDFL will provide direct feedback and suggestions in helping the supplier improve and achieve a desirable level of traceability. Page 1

5 IDFL recognizes that various critical and strategic details may exist within a supply chain and will keep all such critical information confidential from third parties (see IDFL s Audit Confidentiality Agreement for details and for more information). Education Although an audit is the most reliable way to trace a supply chain, the long-term goal for retailers, suppliers and producers is to understand the most ethical and sustainable ways to manufacture goods. To help in this goal, IDFL incorporates education into its supply chain audits. The educational portion of an IDFL audit reviews current issues and provides background on these issues to the separate entities within a supply chain and explains why these issues are concerns to buyers and consumers. Since it is impossible to continuously audit a supply chain, education can improve supplier compliance to client specifications as well as help clients satisfy consumer expectations. Deliverables After all the above work is complete, IDFL will process and analyze all visits and information collected. Upon completion of the data evaluation, IDFL will present the requesting client with site visit reports of different suppliers visited, an executive summary outlining all findings, as well as an audit certificate verifying the completion of the elected audit. Finally, at a predetermined time IDFL will notify the requesting client when an audit should be renewed. Audit Renewal Process IDFL audits are only valid for two years and should be renewed at the end of that period. During the renewal process, if it is determined that there is a change within the supply chain; IDFL will audit the new section(s) of the supply chain to update the audit report. All sections of the supply chain that remain the same will again be re-verified and a renewed certificate verifying the completion of the audit will be issued. For more information regarding any of our audit services please contact any of our offices below or visit Overview of IDFL Audits To help increase transparency of a company s supply chain, IDFL can focus on any of the following audit types, options and scopes as determined by the client. These are outlined in the following table: Audit Type Options Scope IDFL Completes All Work IDFL Verifies Client Internal Audit o Traceability Audit o Traceability Consultation Comprehensive Multi-Leg o Risk Assessment Single-Leg o EDFA Compliance ( Traceability Standard ) Product Specific o Geographic Origin of Down and Feathers o Purity of Duck or Goose Material Annual Audit Update o Evaluation of Bird Husbandry o Other / Special Client Requests Page 2

6 Audit Types 1. IDFL Completes All Work This type of audit gives IDFL the full responsibility of collecting and auditing all of the data within the supply chain to fulfill the requirements of the elected audit option(s) and scope. 2. IDFL Verifies Client s Internal Audit This type of audit allows IDFL to verify an already completed internal audit conducted by the client. Having an independent third party, such as IDFL, verify the data and findings helps show buyers and/or consumers that certain standards are being held within a specific supply chain. Audit Options Traceability Audit - Examines the level of traceability within a given supply chain. Each level of the supply chain will be evaluated by collecting data that will be examined to determine the ability of suppliers to trace and manage material. Traceability Consultation - Includes information, insight, and recommendations to improve a specific point in a supply chain or the entire supply chain traceability process. Risk Assessment Narrows the focus of a particular audit to identify positive or potential negative issues within a supply chain. Some common risk assessments include but are not limited to: the risk of raw material coming into contact with washed material, examining the likelihood and risk of illegally-obtained live-plucked material entering into a specific supply chain, etc. EDFA Compliance ( Traceability Standard ) The members of EDFA has agreed to us the EDFA Traceability Standard as the guideline in documenting the origin of down and feathers. IDFL can conduct an audit following the EDFA Auditing Standard to verify compliance of these specific standards. Geographic Origin of Down and Feathers - Determining the geographic origin of down and feathers comprises of two parts: 1. IDFL conduct a supply chain audit to verify origin based off of standard documentation. 2. IDFL can collect and test material using Isotope testing to compare Isotope levels that are specific to different regions all over the world. Purity of Duck or Goose Material - Completing an audit in order to compare receipts, tracking systems, processing facilities, etc. to determine the purity of duck or goose material. IDFL will also incorporate standard specie testing on material collected at different points in the supply chain. Evaluation of Bird Husbandry - Includes a complete examination of a given supply chain to determine whether or not the living conditions, treatment, etc. of birds used for products produced and sold by a client are within the law and the client s specific requirements. Other / Special Client Requests - IDFL is happy to customize an audit according to specific client requests. Page 3

7 Audit Scope Comprehensive Audit - Reviews the entire supply chain for all products produced and sold by a client. Multi-Leg Audit - Two or more suppliers and their sub-suppliers need to be audited, but it is not necessary to audit the entire supply chain. Single-Leg Audit - Only a single supplier and its sub-suppliers need to be audited. This scope can also be used when an additional supplier is added to the supply chain and only the new supplier needs to be audited. Product Specific Audit - Limits the audit to a single product sold or produced by a certain retailer, trading company or manufacturer. Common Down & Feather Supply Chain Types Below are 4 examples of common down and feather supply chain types followed by a simple diagram outlining them. Supply Chain 1 European Style Slaughterhouse In a European style slaughterhouse chain, birds are bred for the meat industry at larger farms. Once the animals have reached the desired age and size they are transported in large groups to a licensed slaughterhouse. The down and feather material from each group of slaughtered animals is then pre-washed and dried at the slaughterhouse before it s transported to a feather factory that completes the final processing of the material. In some cases, there may be an agent between the slaughterhouse and the feather processing plant, however, most of the larger feather plants deal directly with the slaughterhouses. When a slaughterhouse is licensed to sell meat in Europe or to export meat to the US and other countries, these slaughterhouses are required to follow certain procedures and standards based on the country they are exporting the meat to. For the most part, these slaughterhouses purchase their birds from large organized farms simplifying the traceability of materials making the supply chain more direct. Supply Chain 2 Family or Township Slaughterhouse with Co-op Meat Packing Plant A township slaughterhouse chain usually consists of a meat packing plant in a town that cooperates with a number of smaller slaughterhouses in the same town. Generally, these small slaughterhouses are familyowned. Once slaughtered, the birds are plucked either by hand or using simple machinery. The meat is immediately delivered to the meat packing plant where it is then processed and frozen. The down and feather material is then delivered to a feather plant (pre-processor) in the same town where the material is pre-washed and pre-sorted. Although the down and feather material comes from several smaller slaughterhouses, all of the birds from a township slaughterhouse come from local farms and are raised in accordance to the slaughterhouse procedure, that is, all the birds receive the same feed and are slaughtered at the same age. The meat plant ultimately controls this to get a uniform quality in each lot. Page 4

8 The traceability of down and feather material in this type of a supply chain is more difficult to follow than compared to the traceability of a European Style slaughterhouse chain. However, if you are buying down and feathers directly from a pre-processor (connected to a township slaughterhouse), you will often know that the down came from that town because the pre-sorting plants do not normally mix their materials with down and feather material from different regions. Some of the down and feather material produced in China come via Township Slaughterhouses. For example in the Yongchuan District, covering 19 townships, there are more than 300 small individual slaughterhouses. Combined, these slaughterhouses can produce 10 tons of down and feathers per day. Supply Chain 3 Local Collectors The most difficult supply chain to trace is when 3rd party agents buy down from local collectors all over Asia. There are a number of small slaughterhouses and farms that are not part of township slaughterhouses. These small slaughterhouses slaughter the birds and deliver the meat to local markets, while the down and feather material is usually dried in the sun and then packed into bags for sale. The local collectors take the bags and sell them to agents. Agents will then collect the down and feather material from many different areas until they have enough to sell to a processing plant. The following traceability is very difficult in this type of chain. From a realistic point, farms with small flock sizes (i.e., 20 geese or ducks) typically will sell small amounts of down to collectors or agents. Down from agents adds to the difficulty of following traceability because accounting and receipt records are typically not kept. Supply Chain 4 Agents That Mainly Use Township Slaughterhouses The major difference in Chain 4 is that there are agents in-between the pre-processors and the down processing plants of any of the previous three supply chains. Every time you add a 3rd party agent into the supply chain, the traceability of the down and feather material becomes more difficult to follow. Additionally, there is always the possibility that the agents are mixing down from different sources. In order to maintain traceability, the 3rd party agent must have a good internal traceability system, batch control, bale tags, documentation and system processes. See the diagram on following page for an outline of these four common types of down and feather supply chains. Page 5

9 Example of Supply Chart for Down Products Retail Store Distributor / Trading Company Finishing Factory Down Processor Slaughterhouse (European Style) Transformer in connection with a Township Slaughterhouses Meat Packing Slaughterhouse 1 Slaughterhouse 2 Local Collector 1 Local Collector 2 Farm A Farm B Agent Agents can find themselves at any given point in the down and feather supply chain and typically complicate the traceability of a supply chain. Farm A Farm B Chain 1 Chain 2 Township Slaughterhouses Chain 3 Chain 4 Page 6

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