Sustainable supplier management
Ships service - marine products
Marine products are present in 180 locations and 73 countries. Some of the locations are own operated (40%), but most are operated by service providers (60%). Products are sourced from approximately 1 000 suppliers globally and the procurement activities are managed centrally for standard products and locally for non-standard products, gases and refrigerants. All selected suppliers for customer products must comply with ships service’s supplier Code of Conduct.
In 2017, sustainability criteria for marine products supplier assessments covered governance, health and safety and working conditions. Supplier management activities are monitored by visits, audits, and business reviews. Findings and corrective actions are shared with suppliers, and followed up closely. Local suppliers of gases and refrigerants are audited and visited for quality assurance. The frequency of the audits varies depending on which tier the supplier falls into. Third party transportation and warehouse service providers are subject to a similar auditing scheme.
In 2018, environmental and social measures will be incorporated into audits and business reviews. The structure of the local sourcing process will also be standardised to improve our supplier relationship management.
Ships service - ships agency
Ships agency buys products and services on behalf of customers globally from an estimated 7 700 suppliers. Currently, procurement activities are mainly executed on a local level. Suppliers are ordinarily managed in three categories;
- Category 1: Sub-agents, providing key operational services on behalf of Ships agency
- Category 2: High-risk service providers, such as land and launch providers
- Category 3: All other suppliers.
The localised supplier management activities include global standards for the selection and ongoing performance management for all category 1 and 2 suppliers, who are deemed high risk regarding customer service quality and safety requirements. Therefore, all suppliers in these categories are subjected to the standardised selection process including relatively broad environmental criteria, referring mainly to management systems and processes which might be in place to manage the suppliers’ environmental impacts.
Our safety standards for land and launch providers, such as pre-start checks on all motor vehicles and launches, aims at reducing incidents for the safety and wellbeing of personnel transported. However, ships agency identifies that this also provides an avenue for negating an environmental impact through improving the standards of equipment used. It is also a pre-requisite for all land and launch companies for providing services for Ships agency.
During 2017, ships agency focused on the implementation of land and launch safety standards and practices for all providers globally along with the auditing of high-risk sub-agents.
In 2018, ships agency will conduct a large scale improvement project analysing the opportunities in centralising decisions and execution activities related to procurement. There will also be continued sharing of lessons learned with suppliers, to support improved standards within the industry; and work towards a zero paperwork goal to removing unnecessary paperwork from transactions.
Wilhelmsen Chemicals is a manufacturer of chemicals for the marine market and the consumer markets. The total number of suppliers to the factory of raw materials and packaging components are approximately 100, mainly located in Europe.
In 2017, approximately 33 000 metric tonnes of raw materials were purchased through our supplier base. Half of the volume was delivered in bulk by vessels and the other half in bulk by trucks or in intermediate bulk containers (IBC).
For packaging, local suppliers are used to the extent possible, avoiding transport of empty packaging. Our main supplier of plastic cans and bottles is located nearby our plant.
Frame agreements with our main suppliers have a requirement stating that all business activities must to be carried out in a manner that complies with regulations, child labour and human rights laws, and considers environmental implications. Suppliers must carry out business in such a way that maximum effort is made to protect the internal and external environment, treat waste safely and systematically to secure maximum level of recycling.
Ship management encourage suppliers to adopt the International Marine Purchasing Association (IMPA) ACT Supplier Code of Conduct (SCoC). The SCoC seeks to improve the economic, social and environmental sustainability of international shipping and marine industries, and is aligned with the United Nations Guiding Principles on business and human rights.
In 2017, ship management developed a standardised approach to screen new suppliers using environmental and social criteria. More than 300 new suppliers were screened, and categorised as approved or active suppliers. Ship management also implemented a process for periodically re-evaluating approved suppliers, and reviewed the purchase order (PO) terms to provide clear instructions to suppliers and a set of sustainability requirements that can more easily be evaluated.
In 2018, ship management aim to improve internal awareness of responsible purchasing, supporting employees on shore and on vessels in making better purchasing decisions. Supplier screening will continue to be a key focus in 2018, and ship management aim to work with at least three preferred strategic suppliers to further the commitments made in the IMPA ACT SCoC.