A quality product is the result of shared standards, cooperation, joint efforts, stable and trust-based relationships with all partners in the supply chain. The Group believes in the importance of developing increasingly closer and profitable synergies and collaborations with those who not only guarantee reliability in production performance, but also share the company’s values and expectations in terms of ethical, environmental and social standards.

A total of 667¹ suppliers are involved in the manufacturing of Moncler and Stone Island products. They are divided into four macro-categories: raw materials, façon manufacturers, finished products and services.
• Raw material suppliers mainly provide fabrics, yarns, down, leather and production accessories (buttons, zippers, ribbons, elastics, etc.). Fabrics are mainly sourced from Italy, Japan, Korea, China and France. Suppliers of yarn and production accessories are mainly Italian, while the down suppliers are mainly European, North American and Asian.
• Façon manufacturers are suppliers with strong technical skills to which the Group entrusts the production of finished products or intermediate production phases (dyeing, embroidery, etc.), providing them with all the necessary raw materials. In particular, from 2021, within this category also the dye houses that perform garment-dyeing to which Stone Island directly entrusts this process in Italy have been included. The entire production process is carefully monitored by Group experts who verify compliance with the required standards through a rigorous methodology and regular on-site inspections.

In particular, through this process outerwear, trousers, skirts, dresses, all tricot knitwear and some cut-and-sew knitwear are produced. Façon manufacturers are mainly located in Italy and Eastern Europe, areas where long manufacturing tradition guarantees very strong technical expertise and adequate production capacity. In particular, Italy is characterised by a strong expertise in very complex and unusual processes.
• Finished products suppliers are those who, having received the technical design of the products, are responsible for the realisation of the garment, including the raw materials sourcing phase, according to the Group standards; in addition, Moncler directly provides its finished products suppliers with some strategic raw materials such as down, nylon and, of course, logoed materials.
During garment production there is constant interaction between the supplier and the Group experts, who make on-site visits and scrupulously supervise the process, to ensure that the final product meets the expected high level of quality. Some cut-and-sew knitwear (mainly t-shirts and polo shirts), some soft accessories (such as hats and gloves), shoes and bags, and small leather goods are mainly produced in this way. In particular, suppliers of cut-and-sew knitwear are based in Europe and Turkey while suppliers of soft accessories are mainly Turkish and Italian with a high degree of specific skills; shoes, bags and small leather goods are realised by European suppliers, most of them Italian.

• Service providers support the Moncler Group in its pattern making, prototyping and quality control processes and are mainly based near its corporate sites.
Where possible, the Group employs local suppliers located near its main sites to benefit from logistical advantages, generate income and create employment opportunities in the communities where the Group operates. The majority of suppliers (89%) are based² in the EMEA Region, primarily in Italy.

The Group distributes its purchasing expenditure, so as to avoid situations of dependence on its suppliers that could represent a risk for the business. With regard to concentration, the top 40 suppliers account for 50% of the value of orders. The Group is careful to promptly identify critical situations that could cause potential supply disruptions and mitigate the related risk.
In light of the integration of the Stone Island brand, in 2021 the Group further refined its supply chain management strategy to launch a series of actions and initiatives involving critical suppliers assessed using a risk-based approach according to specific sustainability parameters, including: the potential risk relating to human rights in the country where they operate, the type of good or service provided, with particular attention to raw materials of animal origin and to the importance for the business, the presence of subcontractors, in addition to business evaluation criteria linked to quality, delivery times, the economic size of the orders commissioned, the financial dependence of the supplier and any difficulty in replacing the supplier in a short time frame.

For several years, Moncler has been implementing its Supply Chain Excellence programme. It aims at bringing the supply chain to a level of excellence by developing the operational and industrial area according to an advanced model functional to cope with the constant changes of the market.
People and their contributions are the cornerstones of the entire programme. All company departments are involved in the work groups. The critical factors of today and those needed for the future have been analysed, and specific projects were therefore launched. All the projects share the aim of achieving operational excellence in terms of quality, time to market, sustainability, reliability, flexibility and efficiency.
Among the main initiatives implemented in 2021 there are:
• Collection Excellence: the Product Lifecycle Management (PLM) platform was extended to all product lines and categories. All information relating to the development of the collections is now in a single environment shared with all the relevant departments making the process more collaborative and efficient. This project will continue in 2022 with further developments and improvements, involving the redesign of workflows and the integration of the various company management systems.
• Supply Chain Collaboration: this project is aimed at creating a new collaboration platform that will give Moncler a higher visibility and control over all production phases with consequent advantages in terms of reactivity and operational flexibility. Though the project has been slowed down in recent years due to the Covid-19 pandemic, it was resumed in late 2021 and will become fully operational during 2022.

The new platform will be shared with façon manufacturers, who will feature special applications that will allow to communicate in real time with Moncler, thereby improving the management of raw material warehouses, production planning, and inbound logistics.
• Approach to continuous improvement: in line with the objective of constantly improving the Supply Chain & Operation processes, the management team regularly meets to monitor and assess operating performances.
• Continuous improvement of garment quality: the process path aimed at strengthening internal technical skills continued to ensure constant oversight of the design, industrialisation, pre-production and production phases, whether performed internally or at suppliers’ premises. This approach will continue over the coming year, increasingly focusing on the quality of upstream processes thus contributing to reduce possible finished products defects.
• Continuous improvement of the quality of raw materials: in line with the attention posed on the quality of the garments produced, the improvement process focused on the quality of raw materials also continued. The objective of the project is to promptly identify any qualitative issue and defect in order to reduce the risk of non-compliance and improve the overall level of service of the supply chain. The activity, initially focused on the yarn and knitwear division, will be extended in 2022.
• Transportation traceability: a project has been launched to track shipments accurately, from raw materials to distribution of the finished product, providing timely information on their progress at the various phases. In this regard, an ad hoc report will be made available during 2022.

• Moncler by Me: during 2021 a new project called “Moncler by Me” was launched to offer clients the opportunity to create and purchase a customised jacket. The project, launched at the Paris Champs-Elysées store in September 2021, will also be extended to other stores and to the e-commerce channel over the upcoming years. To support this service, Moncler has dedicated a production process and a department of its production site in Romania to the creation of customised garments, where the best technologies and expertise are applied to ensure the quality of the processing.

• 3D Project: from 2018, Moncler has started integrating 3D technology into the product development process. The digital design minimises the need for physical samples, leading to the reduction of waste, of development times and of production costs for prototypes. This makes it possible to digitally adjust the fit and find the correct proportion for each size, and to assess the performance of the fabrics, colours and patterns. On average, starting from 100 virtual garments it is then proceed with the actual prototyping of 30% of them.
• Zero Waste Project: in 2021, all the obsolete materials (fabrics, components, etc.) present at the main Moncler warehouse, have been classified and assessed. This activity allowed to have a precise vision of the inventories, making them available for the production of the new collections and thus reducing generated wastes.
Lastly, in 2022, to promote the inclusion in the Company of technical personnel specialised in the fashion sector, Moncler will launch the MATE (Moncler Academy for Technical Excellence) programme to create a school of craftmanship aimed at training the technical personnel required to develop the business, such as prototypers, pattern makers and quality experts.