Our factory audit process
We take our factory and vendor relationships very seriously. Every factory that produces goods for our private label brands is expected to meet our Responsible Sourcing expectations for social and environmental compliance.
We evaluate workplace conditions, wages, hours worked, health & safety, non-discrimination and more during each factory audit. Our audits evaluate factory performance based on local law and internationally accepted norms, including guidance from the International Labor Organization.
Tier 1 factories
As of August 1, 2021 (the start of our 2022 Fiscal Year), we work with 114 factories in 22 countries. These factories employ over 72,000 people, 68% of them being women.
You can view our factory list here.
Our factory audit process
Before we engage in a new partnership, our vendors sign our Vendor Code of Conduct and undergo a full social and environmental factory audit.
Our Responsible Sourcing Team reviews every audit and determines whether the factory is considered Low Risk, Medium Risk or High Risk, based upon the findings presented. A passing audit is either Low Risk or Medium Risk. Factories rated as High Risk after an initial audit will not be approved for Stitch Fix production.
We categorize non-compliances as Minor, Major, High Risk and Zero Tolerance. Definitions for these levels are as follows:
Isolated or singular non-compliance with standards that are not likely to cause immediate harm to workers or otherwise, and that are not systematic or likely to repeat.
A significant failure in the management system—one that affects the ability of the facility to meet the standard(s). Without root cause remediation, repeated non-compliance over time will likely result. Or, non-compliance(s) to standards deemed likely to result in an intolerable risk to worker health and safety, the community or the environment, and requiring immediate remediation.
- High Risk.
A grievous breach of ethical standards, or exploitative violations of worker rights, or a situation, practice or event that poses significant immediate harm to workers, the community, or the environment.
- Zero Tolerance.
A violation so serious, threatening such harm to workers, the community or the environment, that it warrants immediate termination of a factory contract, such as forced labor, child labor and unauthorized subcontracting.
We began auditing our private label factories in 2017 using independent, third-party, expert auditors to assess each of our factory’s compliance with our Responsible Sourcing expectations. Audits are conducted both with and without notice. Our audits are conducted to check that factories adhere to both local law and international labor standards. Where there are discrepancies between the two, the more stringent requirement is applied. We audit factories producing goods under our private labels on an annual basis. Factories that maintain a Low Risk rating for more than one audit cycle are placed in a bi-annual audit cycle to reduce audit fatigue and recognize consistent Responsible Sourcing performance.
NUMBER OF FACTORY AUDITS:
Our private label vendors must provide full transparency into all factories producing our goods. Transparency and integrity are of utmost importance to us, and we hold vendors accountable to be open and honest with us about the operations of the factories. Factories must provide us and our audit partners with access to workers, accurate and complete records and factory work areas, when requested.
TRANSPARENCY OVER TIME:
We partner with our factories to develop Corrective Action Plans (CAPs) to help them improve over time. Our CAPs include a root cause analysis, detailed plan to bring the finding into compliance, the individual responsible for managing the plan and an agreed-upon timeline.
There have been cases where we did not approve factories for production due to audit performance, and we exit factories which are unable and/or unwilling to consistently meet our minimum expectations.
In 2020, we created a rigorous audit grading system to better capture factory performance data. In doing so, we are able to allocate resources more efficiently to enable safer working environments for the people in our supply chain. This chart shows our Tier 1 factories broken down by our Responsible Sourcing Risk Ratings (Low, Medium, High).
Through partnership and transparency, we’ve achieved a 7 point increase in Low Risk factories and an 18 point decrease in High Risk factories since FY19. We acknowledge that 3% of our factories still experience High Risk issues. While this doesn’t look “perfect,” transparency is important to us on this journey and we are proud of the improvements we’ve accomplished in partnership with our factories.