Siemens suppliers must qualify on sustainability

8 July 2010

8 July 2010 | Angeline Albert

Sustainability now forms part of all supplier risk and procurement decisions at global engineering firm Siemens. The company’s 2009 Sustainability Report said it has integrated sustainability criteria into risk evaluations of suppliers.

Mandatory online corporate responsibility self-assessments, completed by vendors, are now part of the company’s qualification process. And Siemens is now using a defined set of criteria worldwide to monitor the sustainability-based development of providers.

In an interview with SM last month, Barbara Kux, head of supply chain management and chief sustainability officer, spoke of the board-level role given to CSR. “As a member of the managing board, I’m responsible not only for supply chain management but also for green technologies and sustainability. In this capacity, it’s my responsibility to help our customers to protect the environment while promoting growth.”

The report also revealed that Siemens’ external spend was reduced by £2.4 billion in 2009 as a result of savings and falling revenue. It sourced goods and services worth £30.6 billion in 2009, down from £33 billion in 2008. Supply management activities, strict inventory management and a reduction in sales, administration and general costs also helped to reduce spending.
In addition the firm increased the volume of centrally purchased products at its Munich HQ, which improved economies of scale. 

The report said: “Sustainability in our supply chain can be further developed and implemented throughout Siemens only with even more intensive cross-functional cooperation within the company. To this end, we are working closely with other company functions to specify the requirements for supply chain management and our suppliers and then implementing those requirements across functions.”

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