30 March 2010 | Helen Gilbert
United Technologies Corporation (UTC) is planning to expand responsibility targets to cover hundreds more suppliers, according to its annual report.
The US-based conglomerate, which does business in more than 180 countries, has more than 50,000 companies in its supply chain, and in 2009 spent more than $30 billion (£20 billion) on procurement.
In 2007 the firm, which serves customers in the global aerospace and building systems industries, established minimum environment, health and safety (EH&S) targets for about 1,100 of its main suppliers. These were established jointly by the EH&S and supply management functions to ensure all essential suppliers met UTC's five minimum expectations. Vendors were asked to assess themselves against the following criteria:
• Providing safe working conditions for all employees, customers and contractors;
• Adhering to all applicable national, regional state and local laws;
• Ensuring regulations governing EH&S operate in a manner that minimises the impact on the environment;
• Limiting the use of natural resources;
• And promoting sustainable natural resource practices and communicating expectations to their employees and suppliers.
All vendors met the requirements in 2009 when UTC added another 300 key suppliers to the programme. Now the firm plans to expand the scheme to yet more vendors and align it with its Supplier Gold Programme, which recognises and assists in bringing about top vendor performance.
Last year, 50 per cent of UTC’s key suppliers achieved ‘gold’ or ‘performing’, the highest levels, and the firm expects 70 per cent to achieve these levels by the end of 2011. Suppliers complete self-assessments every three years and UTC conducts on-site reviews for a minimum of 10 per cent of vendors in the programme.
The annual report added that UTC actively seeks out competitive and innovative small and diverse businesses for its supply chain. In 2009, more than $930 million (£616 million) was spent with diverse suppliers (such as veteran, minority and women-owned firms), representing 10.4 per cent of UTC’s domestic spend, up from 9.8 per cent in 2008.