At a Glance
Successes and Actions
- 80 audits were conducted at our suppliers in 2020
- Introduction of SAP Ariba purchasing software for greater transparency on sustainability in the supply chain
Our global supplier network makes an important contribution to the added value, quality and innovative strength of our company. Consequently, our suppliers have a significant influence on the achievement of our sustainability goals and are at the same time strong partners to make a positive impact on the ecological and social aspects of our business activities.
We work with around 800 core suppliers to purchase the material that goes directly into our products. Approximately 65 percent of these suppliers are based in Europe, 30 percent in the Asia-Pacific region and 5 percent in the western hemisphere outside Europe. We procure more than 85 percent of this purchasing volume locally in the respective sales regions.
of our direct purchase volume is procured locally in the respective sales regions.
We regulate the principles of collaboration with our direct suppliers in our Code of Conduct for Suppliers. These include the basic principles of the fight against corruption, human rights including not using child or forced labor, working conditions and minimum wages, handling of hazardous substances and environmental protection.
The basic principles of our corporate culture – integrity, courage, teamwork and commitment – describe the inseparable connection between business success and corporate responsibility toward employees, business partners, society and the environment. We also require our suppliers to practice these values and act accordingly corresponding to our Code of Conduct. For this reason, each direct supplier with whom we work is contractually committed to implementing and complying with these basic standards.
Promoting improvements with audits
All our direct suppliers have signed the Code of Conduct for Suppliers or have their own codes that meet our requirements. Within the context of regular, standardized and announced on-site audits, we verify compliance with and implementation of these agreements, inter alia. This is done by our internal experts or the external auditors of Bureau Veritas.
Potential direct suppliers undergo an evaluation audit before we enter into a business relationship with them, which also includes ecological and social criteria. If we enter into a business relationship with a supplier, a process audit with a focus on product quality takes place before the start of series delivery. These audits are repeated every three to five years. Working conditions and safety standards are also assessed. If a business partner repeatedly violates the agreed standards and there is no sufficient improvement in this situation, we terminate the business relationship. A total of 80 audits were carried out at our suppliers in 2020.
Together with our partners we want to make our supply chains systematically more sustainable.Brian Sieben,
Head of Sourcing Excellence
Five steps toward greater sustainability
To make our supplier relationships systematically more sustainable, we have developed a strategy that gradually raises our activities to a higher level. As a first step, we focused on creating a high degree of transparency with respect to our business partners. The goal is to transparently track and manage all product-related compliance certificates and declarations (for example, RoHS & REACH), all company-related environmental certificates, the signed Supplier Code of Conduct, the results of our supplier audits as well as external ratings and validated supplier data from, for example, Dun & Bradstreet, EcoVadis or Integrity Next on one platform. The use of the SAP Ariba purchasing software solution is closely related to this concern. We are already in contact with approximately 750 suppliers via this system, who handle more than 80 percent of our total purchasing volume of components and raw materials. Our goal is to be in contact with all suppliers via SAP Ariba in the future, including those from whom we purchase office supplies and services, for example. This enables us to document standards, agreements and audit results and supports us in cultivating our supplier relationships systematically.
In a second step, we want to ensure the sustainability assessments and key figures of our suppliers in all procurement processes. For this purpose, sustainability assessments such as those of EcoVadis or Integrity Next are consulted, which are entered into a bonus malus system in SAP Ariba. After evaluating our entire supplier portfolio, we plan to focus more on sustainability initiatives for individual material groups in a third step. In this phase, we also want to confer a Best Practice Award for outstanding sustainability initiatives by suppliers. In a fourth step, we intend to expand our subcontractor management systematically to include sustainability aspects and involve them in our sustainability management. Finally, in a fifth step, we want to promote the integration of “EcoSourcing” and the circular economy further in our product development process.
Responsible handling of conflict minerals
We currently process tungsten and cobalt in our products, as well as tantalum and gold in certain electronics. At present, there is no equivalent substitute for these minerals, the extraction of which is helping to finance conflicts in some regions of the world. We ask our suppliers about the origins of these materials in order to ensure that this is not the case. Our long-term objective is to replace conflict materials with less problematic materials as far as possible. For example, we are currently conducting an internal research project to replace cobalt in diamond segments with nickel or iron in the medium term.
Reduction of our carbon footprint in cooperative partnership
Together with our suppliers, we are also working on the impact of our business on the environment. For example, together with our most important supplier of installation systems in Europe, we were able to reduce our CO2 emissions by optimizing transport routes to our plants and selected major customers. The conversion, which began in 2019, was completed in 2020 and resulted in a reduction of 300,000 km per year – a reduction of more than 200 tons in CO2 emissions.
of annually saved CO2 emissions thanks to just one transport route optimization.