Walter Fong Director Trade Compliance

Levi Strauss & Co

Founded in 1853 in San Francisco

Inventor of the denim jean

Sold in over 110 countries

Brands include Levi’s, Dockers, Denizen, Signature

Retail

Supply Chain Security

Group

Apparel brands and retailers have been at the forefront of CTPAT participation.

16 of the top 25 importers* are apparel brands and retailers. After 9/11, this industry worked diligently to ensure a secure supply chain.

* The Journal of Commerce May 28, 2012 Top 100 Importers & Exporters via Ocean Container Transport

For the past 12 years, efforts were made by apparel brands and retailers to audit factories and address the CTPAT requirements

◦ Developing audit requirements for supply chain

security through internal or third party auditors ◦ Basic training on security requirements ◦ Performing audits against these standards ◦ Demanding immediate corrective action for those

that fall short

Retailer B

Retailer C

Retailer A

Shared Supply Base Apparel Brands,

Retailers

Result TODAY

• Audit Fatigue • Confusion • Inefficiency • High Cost • Focus on audits,

not on remediation

• Duplication of efforts

A group of apparel brands, retailers and third party audit firms began a grassroots effort to harmonize existing efforts in factory security audits

Goal: ◦ Deliver a common, consistent and global approach

for the continuous improvement of factory security in global supply chains

The Home Depot

Nike

Accordia Global Compliance Group

For Factories • Clarity & consistency on security

requirements • Fewer audits • Time and resources can be

focused on production and security

For Retailers & Brands • Lower costs • Better results with focused efforts • Time and resources can be

focused on remediation, education & training

• Can exchange best practices with other retailers and brands

For Industry • Best practices can be shared • Standard checklist

For CBP • Assurance that industry is

working together to strengthen supply chain security

• Provide feedback that can be funneled to factories overseas

Covers CBP security requirements: 1. Business Partner Requirements

2. Container and Trailer Security /Conveyance

3. Physical Access Controls

4. Personnel Security

5. Procedural Security

6. Physical Security

7. Security Training & Threat Awareness

8. Information Technology Security

Advantages:

The same questions are asked

Easily integrated to in-house or 3rd party databases

Checklist answers able to be readily shared

Independent of company specific scoring methodologies

Pilot was conducted in late 2011and early 2012, using the standard checklist

Third party auditing firms participated in the pilot and provided feedback on audits and results

After pilot, working group made adjustments to the checklist including rewriting questions

Checklist reviewed by CBP in December 2012

Outreach Checklist distribution ◦ Via Email ◦ LinkedIn Group ◦ Website (under consideration) ◦ Select 3rd party audit firms

Industry adoption Opens the door for future collaboration ◦ Shared audit database ◦ Future checklist enhancements ◦ Incorporate to global programs, like AEO

Checklist adopted in 2012

Leveraged as a self assessment and audit tool

Used to support validation in 2012

Walter Fong wfong@levi.com 415-501-7863