Maersk sets procurement standards for buyers

13 April 2011

13 April 2011 | Angeline Albert

Shipping company A P Moller - Maersk Group is transforming its procurement strategy this year to stamp out inconsistent practices among its 4,000 buyers.

Stig Romby Nielsen, a senior director in group procurement, told SM that faced with no “consistent approach” across its 16 business units, the company has launched a Responsible Procurement Programme to develop buying guidelines for the whole group. The procedures will help buyers select suppliers and track their performance. IT systems will also be improved.

“We have always focused on doing business in a responsible manner, and more recently we started to work on consistency in the social standards we use for selecting and working with our suppliers in different business units, including a third party code of conduct,” he added.

The company has 108,00 employees in 130 countries and a $20 billion (£12.2 billion) annual procurement spend with a 100,000-strong supply base. It is working on a number of measures which will improve purchasing and make its supply chain more sustainable to meet international standards.

A code of conduct is being established which will reflect the conventions of the UN’s InternationalLabour Organization to address any corruption, health and safety or other labour issues in the supply chain.Maersk has set a target for 2011 to assess 50 per cent of its purchasing spend by examining major suppliers and signing them up to the code. A total of 200 buyers will be trained in the next few months in order to roll out the code effectively.  

In its 2010 sustainability report, Maersk said it had developed IT software to help buyers conduct supplier assessments, schedule interviews with supply organisations and keep track of their performance. In China and Denmark, 500 suppliers participated in a software pilot, which revealed that buyers needed more education in this area.

Renata Frolova, head of responsible procurement said: “We have used different IT systems in different units. We want to have a formal common approach across the group.”

The report said the only way to make responsible procurement work was to “empower” buyers to start critical but constructive dialogue with suppliers.  

At the end of this year procurement functions will be assessed on the percentage of spend examined, the amount of suppliers who acknowledge the code of conduct and the percentage of those organisations where code-compliance actions have been completed.  

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