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146 www. bus- ex. com October 08 Strengtheningthechain Keith Regan explains how Deckers Outdoor Corp. is in the midst of a shift in how it handles its supply chain and corporate responsibilities, an evolution that will enable sustainability to come to the forefront across the company

I October 08 www. bus- ex. com 147 improve every season in how our products impact the world we live in," says Monica DeVreese, the Simple brand manager. Simple has grown as a brand by focusing on the front-end issues around that equation, developing a strong base of suppliers who can certify that their cotton is grown organically, for instance, or who have their own track record of taking green issues seriously. The attention now is turning to the back- end operations of Deckers and how improvements can be made there in the same vein. " That's really the next step for the company." Building an ethical supply chain means being able to account for all steps of the processes that produce Deckers shoes. That starts with vetting suppliers carefully and extends to assuring that conditions in the Chinese factories where many of the shoes are produced meet standards as well. Fegley says Deckers is working to have better systems in place to audit the workplace safety and environmental track records of its suppliers and factories. Audits may look at everything from how much workers are paid and how much time off they receive to information on pollution and even what the insides of factories look and feel like for the workers. While all Deckers brands are moving in that direction, the Simple brand is ahead of the curve. Because of the Collegiate Licensing Company ( CLC) product collaboration with several universities in the US, the brand complies with the Fair Labor Association's standards for sustainability. Another project currently in the works at Simple is to build a Web site where consumers of the Simple brand can go online and track where the organic cotton used in their product comes from, while also monitoring the certification process throughout the supply chain. " We want to be able to offer true transparency to the consumer," DeVreese says. While more companies every day try to apply the " green" label to their products, " you can't hide behind smoke and mirrors," she adds. " Part of the attitude of our brand is that we want the consumer to know that we're trying our best to make the right decision. When consumers see what we're doing, we want Deckers Outdoor Corp. n some ways, Deckers Outdoor Corp. has stayed true to its roots. Thirty- five years after its founding, the company is still based in Goleta, California, not far from where then- University of California at Santa Barbara student Doug Otto began making and selling sandals. Today, though, Deckers is a global company with a stable of high- profile outdoor footwear brands, including Teva, Ugg, Tsubo and Simple, a line that emphasizes sustainability. Green is more than a marketing technique at Deckers, however, with the company in the midst of internal changes aimed at enabling it to constantly improve the sustainability of its supply chain. Mark Fegley, senior vice president in charge of the global supply chain at Deckers, says the company is gradually shifting its mindset to become more of a process- focused organization. " It's not a change that happens next week or in two to three weeks," Fegley says. " But over the course of the next two to three years, the shift will happen." The evolution is necessary, he adds, because of the way Deckers works. " If you take a look at our operations, there are several areas of our business process that are inextricably linked." Product developers need to work more closely with buyers who source materials, for instance, and the supply chain needs to support innovation overall. " Being task-focused isn't the way to make that happen." The journey has begun with six sigma techniques meant to start the change, which will mostly take place in the minds of Deckers employees, Fegley adds. " The whole concept of having customers within the organization is one that we're emphasizing more and more. There was a time when the supply chain stood as a discrete operation, set off from the rest of the company. That isn't how we want to go forward." The change may be best exemplified by the Simple brand, which emphasizes green materials and fabrication techniques, using materials such as organic cotton. Within Deckers and especially with respect to Simple, sustainability means " from a moral and ethical standpoint, trying to do the best we can to