Responsible supply chain
Kemira expects business integrity from its suppliers and strives for supply chain responsibility through careful selection of suppliers, performance evaluation and auditing.
Kemira’s supply chain management is responsible for end-to-end sourcing process from supplier identification to customer service. The vision is to become world-class in supply chain management and to provide value-added service to our business segments with optimal efficiency.
In 2012, Kemira set sustainability targets for our supplier relations. We initiated a supplier performance evaluation program and implemented the Code of Conduct for suppliers, distributors and agent (.pdf) (CoC-SDA) in all relevant supplier relationships.
Disciplined management of supplier relations
Supplier relations management is built on three pillars; supplier selection, commitment to responsible business conduct, and performance evaluation. We have sharpened our supplier selection process, and expect cost-competitiveness, short-term operational excellence and long-term business stability from our suppliers.
Each supplier is expected to sign Kemira’s Code of Conduct for suppliers, distributors and agents
The CoC-SDA sets requirements for different aspects of corporate responsibility, for example responsible business conduct, respect for human rights and environmental responsibility. By the end of 2013, 36% of Kemira’s current suppliers have signed the CoC-SDA.
To ensure the suppliers’ commitment towards the CoC-SDA, regular supplier audits are conducted. For non-compliance or unwillingness to sign the CoC-SDA, the supplier relationship may be reconsidered.
Supplier performance evaluated and audited
In 2013, we developed our supplier performance evaluation program by defining the evaluation criteria. The evaluation covers multiple aspects of the supplier’s operations, and the threshold performance rate is 80%. For our core suppliers, we aim to keep the average performance level at minimum of 96%, and in 2013, performance rate was 94%.
Those suppliers not able to reach the threshold need to present a detailed corrective action plan to meet the requirements. In 2013, 11% of the reviewed suppliers did not reach the given performance level, and we have agreed upon corrective actions with them.
Kemira has also initiated a supplier assessment process as part of the supplier performance evaluation. A specific assessment of the most risky and critical vendors is made by assessing the supply risk, business impact, market availability, and various sustainability topics gathered. The assessment is conducted through a questionnaire that was piloted and fine-tuned in 2013. During the year, 29 suppliers were audited.
Kemira's supplier base:
- 650 raw material suppliers
- 100 core suppliers, making up approximately 80% of the spend
- About 10,000 suppliers in total
- Geographical split: 85% of suppliers are from EMEA and North America regions
Mitigating the impacts of transportation
Safety and environmental aspects are important for managing the sustainability of transportation. Kemira holds regular safety discussions with its logistics service providers and inspects accidents and near misses carefully. Transport safety managers from EHSQ meet twice a year to discuss occurred accidents and other safety issues on a global scale.
In 2013, we have calculated the greenhouse gas emissions of our transport activities for the first time. Further details can be found in the GRI report, indicator G4-EN30.
In Europe, all of our logistics partners are required to use Euro 4 compliant transport equipment, and Euro 5 requirements will become timely from the beginning of 2015. These Euro standards set limits for pollutant emissions caused by road vehicles. Using Euro 4 and 5 compliant vehicles reduces emissions from transportation in Kemira’s value chain, and thus decreases our environmental impact.
During 2013 we have cut down the number of our logistics service providers to ensure cooperation with the best possible partners. Fewer partners facilitate the management of logistics sourcing as well as the negotiation with suppliers on safety and environmental requirements.
Please see complementary specific standard disclosures material for the focus area in the GRI report section Responsible supply chain.