Puma, the sporting goods company, has launched a supply chain initiative designed to help suppliers to improve environmental, health and safety, and social standards.
It is working with GT Nexus, the cloud-based business network and platform for global trade and supply chain management, and IFC, a World Bank development institution focused on the private sector in emerging markets.
The first phase of the programme will be rolled out in Bangladesh, Cambodia, China, Indonesia, Pakistan and Vietnam. Puma suppliers will be offered financial incentives to improve standards.
In its first phase, IFC will adopt a financing structure with tiered pricing of short-term working capital, offering lower costs for those suppliers that achieve a high score in Puma’s supplier rating system. The ratings are assigned based on Puma’s monitoring of suppliers’ adherence to its social and environmental standards through an auditing process.
“This financing programme enables our suppliers to leverage their relationship with us and benefit from Puma’s strong reputation and financial position”, said Lars Soerensen, Puma’s chief operating officer. “This is the first programme in our company that rewards a supplier’s rating within Puma’s environmental and sustainability program through related fees.”
The GT Nexus platform enables participants to operate against a core, real-time set of information across multiple supply chain functions. This optimises the flow of goods, funds and trade information.
Ball Planet, an SME with production facilities in China, is the first supplier to join the scheme. General manager Ken Hong said: “We are keen to start using this financing facility, since access to affordable financing is always a challenge. This innovative programme will not only help us improve our cash flow, but will also provide us with a financial incentive to improve our environmental, health and safety and social standards, which will ultimately reduce our operating costs and enhance our performance.”