Creating responsible partnerships with our suppliers

Foster an ongoing dialogue with our suppliers to continuously improve their Corporate Social Responsibility (CSR) maturity.

A handshake to seal an agreementClick to enlarge

Sustainable Development is embedded in each step of the Purchasing Process and we pursue additional initiatives to integrate sustainability into our day-to-day relationships with suppliers. 

Several instruments are fully embedded in our supplier selection process; they enable us to obtain information from suppliers in a structured way, as well as inform suppliers about our policies and expectations.

  

J-F-Dehem-1In 2016, we invited 315 suppliers to perform a third party assessment. Our objective is for all Critical Suppliers to reach an acceptable CSR maturity level by 2020. If necessary, we set up a corrective action plan together with the supplier to ensure continuous supplier performance improvement.

Jean-François Dehem,
Sustainability and Innovation Director
Purchasing Function

Supplier Selection Process Instruments

Supplier Selection Process

shutterstock_492355141We apply a worldwide methodology to qualify, select and evaluate suppliers for each tender. We assess suppliers’ CSR level through a Solvay questionnaire or invite suppliers to have an assessment performed by a third party. Furthermore, the template for the contract we send out to suppliers includes a CSR clause and a reference to the Supplier Code of Conduct.

Critical Supplier

shutterstock_515658793Among its suppliers, Solvay has identified about 1,000 critical suppliers. These suppliers are critical because: 

  • they are strategic to the development of innovative partnerships, and/or
  • they present a risk to the business, social standards or the environment, and/or
  • they account for a large amount of spending

Solvay requires these critical suppliers to have a third-party CSR assessment performed and to implement an action plan to mitigate risk if the supplier does not meet the Group’s standard requirements. By doing so, Solvay expects a long-term significant improvement in its suppliers’ sustainability practices and a positive impact on its supply chain sustainability. 

Every Buyer, Every Visit

shutterstock_553612750In 2015, Solvay set up a program with a strong focus on supplier visits called ‘Every Buyer, Every Visit’: during every supplier visit, the buyer takes the opportunity to discuss safety, CSR and innovation.

The buyer then records the discussion in a short meeting report. The goal is to ensure the topic of CSR is brought up in every supplier meeting, but also to ingrain CSR in the minds of buyers. As a result, buyers will follow up on improvements during their regular contacts with suppliers. When a deficiency is discovered, the buyer may decide to call for a site audit followed by a corrective action plan.

Supplier Performance Evaluation

365720276Following up on the performance of our suppliers during the contract period is an  an integral part of the Solvay Purchasing Process.

Each year, 500 to 1,000 suppliers are subject to an internal survey. Buyers are asked to give their opinion of the performance of their individual suppliers, on aspects like total cost of ownership (TCO), the supplier’s CSR, innovation, and the relationship. We also ask internal customers to provide feedback on the supplier’s health, safety and environment performance, and the daily relationship. 

The results of the survey are analyzed and shared with the buyers and internal customers, who then communicate with the evaluated supplier. In cases of underperformance, the supplier is asked to initiate corrective actions.

Survey outcomes also serve as an input for the supplier selection process.

Supplier Satisfaction Survey

shutterstock_291627674Solvay conducts regular supplier satisfaction surveys to give suppliers a voice. Between 500 and 1,000 suppliers are asked to share their opinions of Solvay’s purchasing strategy, policy, processes, people, and relationships.

Solvay reviews the survey results, and when necessary, deploys initiatives to address individual cases of dissatisfaction. Supplier feedback is also used to review our work methods and improve efforts to form sustainable relationships with our suppliers. 

Risk Management

320406782In addition to focusing on critical suppliers, Solvay has identified six major risks in its supply chain management:

  1. Lack of innovation in working collaboratively with suppliers.
  2. Non-compliance with major regulations, which may result in penalties, litigation and reputational damage.
  3. Transport accidents, which may cause injury to neighbors or members of the public.
  4. Lack of oversight of subcontractor supply chains, which may lead to CSR issues, supply chain disruption, poor work quality, or accidents.
  5. The general security situation in a country or region, which could disrupt one of the Group supply chains, causing loss of product and customer complaints. 
  6. Lack of available capacity in the transportation industry, which may lead to higher costs and supply chain disruption.

For each risk, Solvay appoints a risk owner who is responsible for conducting further analysis and implementing a risk response with an action plan. All of those actions are regularly reviewed under the coordination of the Internal Audit and Risk Management Corporate team.

Category Strategy

365720276At Solvay we have integrated category management into our purchasing process to generate more business value, which means generating cash and reducing costs, as well as improving the security of our supply and stimulating innovation.

Category strategies are purchasing strategies covering a specific category, such as rail, travel services, etc. A category strategy is valid for a defined period of time, typically three to five years. 

When setting up a category strategy, we identify any sustainable development issues as part of our market analysis, review suppliers’ CSR scores and define the sustainable development selection criteria for upcoming agreements.

Purchasing and Supply Chain Academies

teamThe Purchasing Academy and Supply Chain Academy are Global Learning Paths for both of the Professional Families. The idea of the Academies is to further develop the talents in our employees, improving their skill sets and increasing their ability to achieve more challenging personal objectives, while building world-class capabilities.

  • The Purchasing Academy is raising the Group’s maturity level and expertise by strengthening capabilities at every point in the Solvay purchasing process and further developing professional soft skills, to deliver “Best In Class” services to the Group
  • The Supply Chain Academy aims to answer the needs of the Supply Chain family in the different GBUs and accelerate value capture with enhanced tools and processes, and to offer soft skills training

Solvay’s ethical standards, like the Codes of Conduct, Corporate Social Responsibility rules, and guidelines on sustainable development and innovation, are included in the modules. The Academies rely on the train-the-trainer concept, actions and experience, and on-the-job projects to maximize the impact on day-to-day activities.

As the Function continues to evolve, the Purchasing and Supply Chain Academies will as well. They will continue to provide an excellent means of supporting training on Excellence initiatives and helping to integrate new people into the organization.