Suppliers and the supply chain

The Sofidel Group’s strategic goal is to have a supply chain with no reputational risk. This goal has been broken down into two lines of action:

  • assessment of supplier sustainability strategies and performance;
  • adoption of a sustainable purchasing model.

The tool chosen for supplier sustainability assessment is the TenP platform’. Developed by the Global Compact Network Italy Foundation, TenP provides a prequalification system for assessing individual suppliers in terms of working conditions, respect for human rights, environmental protection and the fight against corruption. The Sofidel Group has developed a rating system which puts each supplier into a different category (green, yellow and red) based on the score obtained during the prequalification assessment. Sofidel has identified 13 product categories with reputational risk that define the portfolio of critical suppliers and critical turnover (turnover associated with product categories with reputational risk). The target, for the year 2018, was to prequalify on the TenP platform those suppliers that contribute to the achievement of 90% of the critical turnover: the percentage reached was 86%.

During 2018, the target for the percentage of critical turnover to be associated with pre-qualified suppliers on the TenP platform was revised: the threshold was set at 85% of critical turnover in each category with reputational risk.

The product categories with reputational risk can be classified according to the Kraljic matrix, shown below.

Kraljic matrix: distribution of risk categories

The critical turnover associated with each area of the Kraljic Matrix is generated as a percentage of prequalified suppliers reputaon the TenP platform. The percentages achieved for the year 2018 are distributed as follows.

Kraljic matrix: distribution of the critical turnover covered by TenP

Finally, the overall target is verified on the basis of the turnover for the individual product category with reputational risk. The distribution of the percentages reached in 2018 is shown below.

Critical turnover covered by TenP

Based on the new target set for 2019, the product categories Cellulose, Adhesives, Polyethylene and Chemicals exceeded the coverage threshold.

In 2018 the improvement taking place within the Group’s set of suppliers was confirmed, with a rise in the percentage of suppliers assessed as excellent in terms of sustainability (green category).

Sofidel Group suppliers

The assessment of suppliers’ sustainability performance is objectified by a Desktop Audit programme supported by a third party (SGS).

Sharing the results obtained is a moment of celebration with the Sofidel Suppliers Sustainability Award (3SAward): the event was created to encourage, disseminate, enhance and reward best practices and improvements made by the Group’s suppliers in the field of environmental and social sustainability. The third Sofidel Suppliers Sustainability Award was held in Columbus, Ohio (USA), and was attended by around 300 suppliers in 2018.

The event took place one day after the inauguration of the Circleville integrated plant, also in Ohio, the Group’s largest, most modern and sustainable plant. Luigi Lazzareschi, Chief Executive Officer of the Sofidel Group, said:

The opening of our new facility in Circleville, Ohio, was an opportunity for us to bring the 3SAward to the United States and present our idea of sustainable development directly to our US suppliers. We consider the development of fully collaborative relationships with our suppliers as strategic and we therefore work to identify common objectives and paths. The modernity and efficiency of the plant inaugurated yesterday, as well as our commitment to continuous improvement, is also the result of their collaboration.

Sofidel has structured its purchasing sustainability model in line with the ISO 20400 Sustainable Procurement guidelines. In 2018, the Sofidel Group obtained a renewed certification from SGS Italia confirming that the sustainable purchase model complies with the reference standard.

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