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A quality product is the result of shared standards, cooperation, joint efforts, stable and trust-based relationships with all partners in the supply chain. Moncler believes in the importance of developing increasingly close and profitable synergies and collaborations with those who not only ensure reliability in production performance, but also share the Company’s values and expectations in terms of ethical, environmental and social standards. A total of 489 suppliers 1 were involved in the manufacture of Moncler’s products. They are grouped into four macro-categories: raw materials, façon manufacturers, finished products and services.

Raw material suppliers mainly provide fabrics, yarns, down, leathers, accessory components (buttons, zips, ribbons, elastics, etc.), and furs. Fabrics are sourced primarily from Japan, France and Italy. Suppliers of yarns and accessory components are mainly Italian. Furs are sourced primarily in Europe and North America, while down is purchased from European, North American and Asian suppliers.

Façon manufacturers are specialist garment manufacturers with a high level of technical skill, who Moncler supplies with raw materials and entrusts with the manufacture of its final products. The production process is carefully monitored by Moncler experts, who verify compliance with required standards through a strict methodology and regular on-site inspections. This process applies in particular to jackets, trousers, skirts, dresses, all knitwear and some adult cut-and-sew garments. Most of these suppliers are located in Eastern Europe,

where a long manufacturing tradition guarantees a high level of technical expertise and suitable production capacity. Also in 2019, the business model introduced by the Moncler Genius collections, with its continuous product evolution and diversification, led the Company to find new suppliers, specifically in Italy, with strong know-how relating to particularly complex and unique processes.
 
Finished product suppliers manufacture products on behalf of Moncler and based on the technical designs received, sourcing the raw materials themselves as per the Group’s standards, with the exception of strategic materials such as down, nylon, and logoed materials, which are provided directly by the Company. These suppliers and Moncler’s experts interact at all stages of the manufacturing process, which is carefully supervised by the latter to ensure final products meet the high-quality standards required. Part of the cutand-sew garments (especially t-shirts and polo shirts), part of the soft accessories (such as hats and gloves), scarves, footwear, handbags, and small leather goods are mainly produced through these suppliers. Cut-and-sew product suppliers are vertically integrated and are located in Europe and in Turkey. Soft accessories suppliers are mostly Turkish and Italian and have a high level of specific skill, while footwear and handbags are produced by European suppliers, most of whom are Italian.

Service suppliers assist Moncler in pattern making and quality control processes and are mainly located near the Company. Since 2018, several of these activities, including in particular quality control, have been consolidated at Moncler’s logistics hub in Castel San Giovanni, Piacenza, to guarantee even greater efficiency in terms of time-to-market and hence client service.
 
Where possible, the Group avails itself of local suppliers situated near its main offices, which streamlines logistics and generates income and jobs within the local communities in which the Company operates.

The majority of Moncler’s suppliers (92%) are located2 in the EMEA Region, primarily in Italy.

Moncler diversifies its purchasing expenditure across a number of partners so as to avoid dependency on any given supplier, which would pose a potential business risk. The Company’s top 60 suppliers account for about 70% of the total value of orders. The Group is careful to promptly identify any critical situations with the potential to cause supply disruption, addressing them accordingly to mitigate risk.

SUPPLIER BY TYPE3
SUPPLIERS BY GEOGRAPHIC AREA2
ORDER VALUES BY GEOGRAPHICAL AREA
SUPPLY CHAIN EXCELLENCE

Starting from 2018, harnessing the momentum of the Moncler Genius project, Moncler launched an important phase of innovation and development of its model linked to the collections, spanning creation, presentation and delivery. This change required rethinking the way in which the various corporate functions manage the growing complexity arising from the many designers involved, the launch of monthly collections, and the related management of time-to-market, as well as the development of new products that require new processes.

In this context, the development and innovation programme for the Operations & Supply Chain department, already started in 2018, continued in 2019. The programme, called Supply Chain Excellence, aims to take the supply chain to a level of excellence by developing the operational and industrial area according to an advanced and functional model capable of mastering the constant evolution of the market. People and their contribution have been placed at the centre of the programme. About 100 employees have been involved in the work groups, which have produced numerous initiatives and improvement pathways that have required major efforts to review and coordinate internal processes, as well as integration between people belonging to the different departments involved. The critical success factors existing today and necessary for the future have been analysed and specific projects have been launched. They all share the objective of achieving operational excellence in terms of quality, speed, sustainability, reliability, flexibility and efficiency.

The main initiatives launched in 2019 include:

Collection Excellence a complete overhaul of the product development processes was initiated, involving significant investment in a new and modern information management system, “Product Lifecycle Management – PLM”, to reduce time-to-market and increase function integration and collection and garment quality. The first project implementation phase is expected in the early months of 2020.

 
Modelling, prototyping and sample creation activities in-house the most delicate and important stages of outerwear development have been brought in-house at the corporate offices of Trebaseleghe, Padua, Milan and at the Romanian production site. This has favoured and will encourage an increase in the quality of the garments produced, an increase of in-house know-how and a reduction in overall production times.
• A new hub for collection development has been created at the Milan office where the key functions involved in collection design and development work in total synergy and collaboration
Strengthening the quality inspector structure to promote continuous quality improvement, continued the investment in strengthening the team of quality inspectors who oversee the daily industrial, pre-production and production stages at sites where garments are made, including those of suppliers, ensuring product quality from the early stages.

Supply Chain Collaboration to strengthen collaboration and control of the entire supply chain, a project was launched to create a new collaboration platform that will allow Moncler greater visibility and control of all production phases with consequent advantages in terms of reactivity and operational flexibility. The new platform will be open to suppliers with applications to communicate with Moncler in real time.
Manufacturing Excellence new methods, organisation and management models for outerwear packaging based on the philosophy of Lean Management were analysed. The adoption of the latter, in addition to making the production model more efficient and flexible, also led to the launch of “continuous improvement committees” to constantly improve operations’ performance.
“Demand driven operating model” to respond quickly and flexibly to changing market conditions, a revision process of the operating and planning model was launched to create greater coordination between market demand, production and distribution.

NOTES

1Excluding prototype and pattern making suppliers, and suppliers with sales orders of less than 1,000 euros a year.

2 Percentage calculated on the total number of suppliers.

3 For façon manufacturers and finished product suppliers, the geographic location corresponds to the country the product was ‘made in’; for service and raw material suppliers, it corresponds to the country in which the supplier’s head office is registered. Percentages calculated on the total number of suppliers.

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