In the Dow Jones Sustainability World Index published in September 2009, DSM was listed as leader in the chemical industry sector and received a top rating in setting standards for suppliers. Managing the value chain is a key element in DSM’s sustainability strategy. Therefore DSM Purchasing has developed an efficient supply chain management system covering several environmental and labor standards for the selection and evaluation of key suppliers. In 2006 we introduced a Code of Conduct for all global and local suppliers which is based on the DSM values: Respect for People, Valuable Partnerships and Good Corporate Citizenship.
Sustainable purchasing mission
The Supplier sustainability program is aligned to maximally contribute to DSM’s sustainability objectives within Vision 2010. DSM Purchasing takes full responsibility for implementing and continuously improving a sustainable procurement policy for DSM which will ensure a long-term optimization for environmental, economic and social impacts of its purchasing and consumption decisions.
Risk and size based program approach
The global sustainability program uses a 3-step approach consisting of the Code of Conduct, supplier self assessment questionnaires and supplier audits with clear, measurable targets on these three deliverables. The supplier selection for audits and the questionnaires are based on risk and size of the supplier. A size/risk matrix with clear criteria (size of spend, country, cluster/category type, security of supply and specific business risks) is used to identify suppliers with a moderate or high risk position.
Compliance and program targets
During 2008 we made considerable progress regarding compliance:
- Approximately 67% of spend was covered by suppliers who had signed the Code of Conduct as at 31 December 2008 (6% ahead of our target for the year). All new suppliers are obliged to meet our vendor selection criteria from the very beginning of their relationship with DSM. Our target is for 90% of our suppliers to operate under the DSM Supplier Code of Conduct as of 2011.
- More than 100 positive self assessments occurred (more than doubling our target figure of 44 for the year).
- 28 audits took place (target 22) with good results including various joint improvement programs. DSM additionally verified the progress of several improvement programs which had been agreed with suppliers in 2007.
In 2009 we aim to cover 85% of spend (by signed Code of Conduct or integrated in contracts/Purchase Orders), conduct 40 self assessment questionnaires (covering approx. 2-4% of spend) and 20 audits (covering approx. 1-2% of spend).
Continuous improvement
As our aim is to stay leader in our market sector we monitor, discuss and communicate our KPIs internally on a monthly basis in order to initiate improvement plans and actions. Additionally, the program has been evaluated in 2008 by the Purchasing sustainability working group taking into account valuable suggestions of DSM specialists in the fields of Corporate Operational Audit (COA) and Corporate Safety, Health & Environment (SHE). The program is currently further improved and developed based on the evaluation results.
