Taming supply chain risk: Deploying supplier CSR monitoring across a global purchasing organization
Terry Tilford
Group Procurement Excellence Manager
a new world class heating company
Andrew Dick
Program Manager
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Poll question
What are the priorities for your procurement/supply chain
organization?
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BDR Therma Footprint Worldwide
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2 Bn Euro turnover 70 countries, with 20,000 suppliers
and approx. 1,800 direct suppliers
Over 6000 employees Centralised Procurement function
Our Brands
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BDR Thermea boasts some of Europe’s best known and long standing heating and hot water brands.
Challenges: Company transformation
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✓ New Stakeholder expectations
✓ Group establishing policies, culture
• Core values
• CSR policy
✓ Creation of Group Procurement function
consolidate purchasing of:
• 35 Direct Categories
• 15 Indirect Categories
In 2009, merged to a Group entity facing more complex Supply Chain related
challenges:
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BDR CSR process
Better Products Better Supply Chain
Better People Better Company
“Better Together” strategy
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Our CSR goals are:
• Industry leading customer orientation and satisfaction
• Continuous improvement of products and services
• Europe's most user-friendly heating and coolingproducts
• Environmental standards regarding supply chaincompliance
• Highest standards of sustainable labour practices
• Compliance with sustainability reporting standards
Poll question
What are you doing today and planning to do about evaluating risks
in your supply chain?
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Better Supply Chain - Drivers
Our Key drivers are:
✓ Customer expectations
✓ Risk management approach:
• Financial
• General (e.g. Regulations)
• CSR risk
✓ Responsible corporation
✓ CSR Improvement in our
internal business units
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100% of preferred
suppliers and BDR businesses achieved specific
minimumEcovadis scores
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Integrating EcoVadis Assessment Cycle
Select supplier to beassessed
On-boarding + disscussionabout sustainaibility with
suppliers
Supppliercompletes
assessment?
Jointly work on CAP
Co
nti
nu
ou
sim
pro
vem
ent
Supppliera)ignore or b)refuses
assessment?
Yes
No
Yes a)
No a)&b)
BDR Thermea question the relationship with
supplier
Yes b)
Working with suppliers: How we engage Buyers
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*(Removed indirect suppliers and tail end, low spend suppliers)
Centralized Procurement organization were:
➢Commodity managers lead therelationship with preferred suppliers
➢Local site managers (when others)
➢Training and support from EcoVadisdedicated Program Manager
➢EcoVadis score reviewed and CAP
Working with suppliers: How we engage
Suppliers
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1. Letter from CPO and email to suppliers
2. Brochure to suppliers
3. Supplier Webinar + Introduction toEcoVadishttp://intro.supplier.ecovadis.com/
4. Making CSR criteria a mandatory process inbeing a preferred BDR supplier (EcoVadisassessment)
Poll question
Are you using or planning to use any external tool to assess the CSR
performance of your
supply chain?
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How we use the EcoVadis results
Our suppliers must meet our minimum standards of CSR and must achieve ourminimum required standard using the EcoVadis assessment.
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- Will continue the relationship but need to drive improvement
- Strengthen the relationship with suppliers
- Preferred suppliers (engage in New Product Development
- Need to question the relationship
✓ Improve our shared understanding of the issues and
our joint CSR performance with suppliers.
Supplier selection and management
BDR Thermea achieving the most relevant supply base
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Sup
plie
r p
erfo
rman
ce
ITEM* Criteria
Contracts Is a contract in place
RiskBDR thermea risk assessment score
Dunn & Bradstreet risk rating
Quality Supplier potential review score
CSR CSR audit results (EcoVadis)
supply chain
Delivery Performance (on time in full)
supple Methods (Kanban/VMI)
Supplier partnership
Level of collaboration
supports multisites
R&D New Development support
*The table is an example of BDR Thermea multicriteria scoring system
Sustainable Procurement moving forward
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Key Challenges:
✓ Understanding the carbon, energy and waste risks and impacts in BDR’s supply chain
✓ Getting suppliers engaged and on the right mind-set about sustainability
✓ Pushing internal buyer understanding of sustainability
And opportunities:
✓ Focusing on who the “best” suppliers are: ultimately this will also lead to cost reductions
✓ Making BDR more compliant
✓ Improving buyer-supplier relationships and driving better business.
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thank you for your attention