When selecting its suppliers, voestalpine ensures that they comply with environmental and social principles. Sustainable supplier management is integrated into the procurement processes in view of maintaining long-term partnerships.
voestalpine ensures that its employees in purchasing are continually given opportunities for training and continuing professional development (CPD) through informational events such as the Purchasing Power Day as well as the three-stage Purchasing Power Academy, which the company itself developed.
The procurement process is continually optimized in order to ensure Compliance. The Code of Conduct forms the basis of business actions and decisions in this respect.
Raw Materials Procurement
Applying life cycle approaches (closed loop) together with our customers guarantees us the highest levels of efficiency in the process of recycling our raw and reusable materials.
We face the challenge of continually optimizing our supply chains jointly with our suppliers. Regular visits to the sources of raw materials and pre-materials, especially mines and deposits, are a fixed element of this process. Together, we develop methods for designing an efficient supply chain. New suppliers are assessed in terms of corporate responsibility, quality, and performance and, depending on the outcome of the evaluation, are included in our portfolio of suppliers. The Sustainable Supply Chain Management (SSCM) project was used to screen our raw material supply chains from the bottom up, examining key factors pertaining to corporate responsibility. voestalpine ensures that absolutely all of its raw materials are subjected to this process, thus minimizing risk over the long term.
The primary responsibility of raw materials procurement management is to secure the long-term, competitive supply of both raw materials and energy. A high degree of integration into upstream and downstream processes, scenario planning, and adaptive supply concepts serve to minimize potential risks.
Supply chain management
voestalpine has used structured supply chain management for years. The cornerstones of this approach are risk management, the Code of Conduct as an integral part of the company’s delivery terms and conditions, and the Sustainable Supply Chain Management project, which includes a Compliance and Corporate Responsibility Checklist (CSR Checklist) serving to elicit voluntary disclosures from suppliers.
In 2016, the Steel Division put the SSCM supply chain project for raw materials in place and analyzed source countries, suppliers, and mining conditions for that purpose. In a next step, the supply chain of the High Performance Metals Division is currently being linked to that project.
The CSR Checklist is sent to suppliers to obtain voluntary disclosures from them regarding their activities in connection with corporate responsibility. The results are imported into a database that serves as a centralized management tool. Finally, both the findings of the analyses and potential improvements are discussed with the suppliers in personal meetings.
The SSCM project considers the following criteria in reviews of raw materials, source countries, and suppliers:
A concept for analyzing suppliers in terms of risk will be developed during the business year 2021/22 based on insights from the general procurement process. For one, this is designed to carry out risk assessments using prescribed parameters and, for another, to prepare a CSR Checklist based on the SSCM project model, which is provided to suppliers for purposes of voluntary disclosure.
Growing regulatory requirements worldwide provide voestalpine with another decision-making tool for evaluating its own supply chain based on predefined criteria. The developments and findings are analyzed and integrated into the supply chain management processes.
Companies chosen to supply raw materials to the voestalpine Group are selected systematically on the basis of personal meetings, a standardized questionnaire, and a quality assessment of the materials. The raw materials suppliers are evaluated once a year and subsequently rated as A, B, or C suppliers. Depending on the raw materials category, different parameters are used to this end, e.g., environmental management, innovation, quality management, or even flexibility and ability to stick to deadlines.
Suppliers that achieve an A or B rating are given preference in the procurement process. Corrective measures are jointly defined with B and C suppliers and set forth in writing; they must be implemented within one year.
If possible, voestalpine Group companies source their supplies regionally, i.e., from suppliers located in the vicinity of their facilities. The following graph shows the respective share of local suppliers.
Suppliers whose businesses are domiciled in the same country as the voestalpine company they supply are considered local.
Initiatives and supply chain transparency projects
voestalpine is active in a number of advocacy organizations that work on issues of supply chain transparency. For example, experts from a number of different departments participate in working groups set up by ResponsibleSteel in order to help develop the organization’s certification standard as well as product-specific requirements. worldsteel, an industry association, collaborates with TD International (TDI), which provides a platform for systematically identifying risks related to materials and source countries. Here, too, voestalpine contributes its relevant expertise.