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Supply Chain

We procure a very wide range of materials, products, and services from a multitude of suppliers. Our supply chain management involves systematically collecting data on and evaluating the social and environmental effects and risks of suppliers’ activities for the purpose of developing relevant procedures. Given the range of supply chain rules and regulations worldwide, this is an integral part of our Sustainability Strategy and defines principles concerning both general and raw materials procurement.

Sustainable Supply Chain Management (SSCM)

Our supply chain management rests on the following pillars:

  • Risk management
  • The Code of Conduct, which is integral to our delivery terms and conditions
  • The Sustainable Supply Chain Management Project, and
  • The CR- and Compliance-Checklist that elicits voluntary disclosures from suppliers

The Sustainable Supply Chain Management project (SSCM) was initiated as early as the Northern spring of 2016 in order to enhance transparency in our own supply chains. Assisted by an international expert in the field of supply chain analytics, our experts in corporate responsibility, purchasing, raw materials procurement, and quality assurance work together to screen suppliers and countries of origin for pre-defined risks in a multi-stage process—from raw materials mining all the way to product dispatch from the factory gate. These risks concern environmental issues, social matters such as human rights and working conditions, as well as questions of compliance and corporate governance.

Given the large number of suppliers and their geographic diversity, an essential first step is to define the key raw and other materials. Following this, exemplary supply chains are used as models to establish a systematic process for sustainable supply chain management. A typical supply chain in the steel manufacturing sector was developed for this purpose. Subsequent steps included determining the countries of origin and the suppliers of these raw and other materials.

All combinations of materials, countries, and suppliers were analyzed according to the aforementioned risks. In addition to this research, interviews were conducted with select internal and external stakeholders about these risks.

The SSCM Project is being incrementally expanded to cover all the Group’s supply chains. At the same time, a questionnaire asking suppliers to provide information about themselves—the “CR- and Compliance-Checklist”—was developed. Besides questions about general corporate matters, it contains detailed questions on various sustainability issues, such as human rights, occupational safety, climate action policies, and compliance.

The formal proposal for a directive on EU supply chain legislation presented by the EU Commission in February 2022 aims to oblige companies to uphold human rights and comply with rules and regulations related to climate action all along their supply chains. voestalpine undertaking intense preparations to ensure compliance with these requirements.