Sustainable Development: EIPM Archamps 14th March 2008 14th

Transcription

Sustainable Development:
“Is CSR an opportunity or a
constraint to Purchasing?”
EIPM Archamps
14th March 2008
Douglas
Do
glas Else
Else-Jack
Jack
VP, CP-NPMS/eProc
Agenda
g
• MBA Project “Ensuring ethical excellence in the supply chain”
• General Ethics
•
Legal Compliance
•
E
Examples
l ffrom S
Schindler
hi dl
•
Governance
•
Lead or follow
© Schindler | CP-NPMS & eProc | Douglas Else-Jack | Page 2
Agenda
g
• Ethical excellence within CSR
• Definitions and Hypothesis
• Methodology of review
• Findings
• Validation of hypothesis
• Conclusions
• Questions and answers
CSR
Seasons come
and
seasons go.
The beauty of nature surrounds us.
Nature strives to survive as best it can
in this human dominated world.
Imagine a world at peace with itself.
Where man cooperates
p
rather than jjust grasping.
g
p g
Companies would trade seamlessly.
Settling matters in a spirit of consensus
rather than winner takes all.
No more over selling.
No more false promises.
No more p
pointless games.
g
No more tricky
y deals.
No more inducements.
No more bribes.
A world where corporate social responsibility
is applied by all
Building a level playing field,
protecting our world and all of humanity.
Serving one another,
as we would be served
“Ensuring
Ensuring ethical
excellence within the
pp y chain.”
supply
Methodology
gy of reviewing
g hypothesis
yp
•
•
•
•
•
Public Domain Information
Review of Corporate Ethics
Purchasing Ethics
Sales Ethics
Expert Witnesses
40+
100
60
10
3
Literature review
FTSE100 Internet Review
Online questionnaire
Telephone Interview
Transparency International and
Police interviews (2)
Findings
g – Corporate
p
Ethics
FTSE100 Ethics
100
90
80
Compliance
70
60
50
40
30
Most companies
seem to address
ethics issues to a
reasonable degree
Small minority
committed to paying
suppliers on time.
Gap between rules
for purchasing and
those of sales
20
10
FT
SE
4
PA GO
O
Y
D
O
Et
N
hi
TI
cs
M
St
E
at
e
W
Fo m e
hi
nt
rm
st
al
le
C
Bl
C
oC
ow
us
to
e
rP
m
er
C
ol
us
ic
G
y
ift
to
s
m
-r
e
ul
Su r G
es
i
f
pp
ts
lie
r G lim
Su
its
Pu
ift
pp
s
rc
lie
ha
r G - ru
le
s
ift
s
Pu ing
s
-l
Po
rc
im
ha
l
its
sin icy
g
Po refe
re
lic
d
y
-v
i
To sib
le
ta
lS
co
re
0
A few companies
clearly minimum
requirements of
Combined Code &
audit rules to provide
CSR statement
Lip service?
Main MBA findings
g
• Sales & Purchasing have equally dim view of each other
• Sales side stepping purchasing
• Purchasing issuing misleading forecasts
• Sales failing to incl
include
de critical elements in offers
• Purchasing unfairly enforcing penalties (possibly duress)
• Ethics
Ethi ttraining
i i very lilimited
it d iin P
Purchasing
h i / sales
l extensively
t
i l educated
d
t d
• Sales & Purchasing accuse Senior Management of playing lip-service to ethics
issues / frequently exempt themselves from usual CoC controls
• Purchasing governance weak in many major companies
• Agents frequently introduced as barrier to accusation to unethical acts
• Senior management need to be realistic in their target setting and ensure suitable
resources to align efforts
• Purchasing to be realistic when selling CSR impacts / needs
• Legal enforcement best way to drive ethics, companies not too interested
General Ethics
CSR?
Milton Friedman
(Shareholder)
or
St k h ld
Stakeholders
CSR – opportunity
pp
y or hinderance for p
purchasing
g
Shareholder Value
• Ensure profitable growth
• Over riding drive to increase return on investment
• Comply with legal requirements
• Where profitable advance ahead of minimum standards
• Lobby government to ensure equity with international competition
CSR – opportunity
pp
y or hinderance for p
purchasing
g
Stakeholder Values
• Ensure profitable growth
• Share benefits with shareholders, employee’s, wider community
• Comply with legal requirements
• Where benefit indicated for 1+ stakeholder companies should advance ahead
of minimum standards
• Lobby government to catch-up with best in class
Legal Compliance
Good character is more to be praised than outstanding talent.
Most talents are, to some extent, a gift.
Good character, by contrast, is not given to us.
We have built it piece by piece
by thought, choice, courage and determination.
John Luther
Doing the right thing when you’re being watched is to be expected
Doing the right thing when no one is there is the true test
Anon
Schindler Example
Logistics Hub-structure
Realignment of geographic coverage
CO2
40%
Euro4
Mileage
16,518,618 km
14,610,288 km
Cost
€ 33,415,807
€ 27,559,876
Savings € 5,8 Mio & 12% CO2
Increase CO2 requirement to 100% Euro4
Savings € 4.4 Mio & 62% CO2
Increase CO2 requirement to 100% Euro5
Savings € 1.7 Mio & 80% CO2
Purchasing Governance
Purchasing
g Governance
Index
Schindler Policy
Personnel
-Hiring Process
-Training
T i i
-Audit
Purchasing Process & Systems
-4 eyes principle
-Segmentation of processes
-Automation & electronic data trails
Suppliers
-Contract
-Award
Award Criteria
-Vendor CoC
-Hazardous Materials
-Payment
Payment Terms
-Vendor Performance
-Training
-Audit
Audit
CoC Office
-MOM
MOM
-Process Management
-Process audit
-Investigations
Lead or Follow?
“Stand up for what you believe,
where ever you find
f
yourself,
f
f whomever
for
h
you work.
k
When you find flaws in your organisation
either
ith fix
fi and/or
d/ reportt them,
th
b t remember,
but
b you are responsible
ibl for
f what
h t you do
d
and more importantl
importantly for what
hat you
o do not do"
What are you doing?
Attachments
Purchasing Governance
Douglas Else-Jack
C
Corporate
t P
Purchasing
h i
Index & agenda
Purchasing
g Governance
Index
Schindler Policy
Personnel
-Hiring Process
-Training
T i i
-Audit
Purchasing Process
-4 eyes principle
-Segmentation of processes
-Automation & electronic data trails
Suppliers
-Contract
-Award
Award Criteria inc CSR
-Vendor CoC
-Payment
Payment Terms
-Vendor Performance
-Training
-Audit
Audit
CoC Office
-MOM
MOM
-Process Management
-Process audit
-Investigations
Schindler Policy
Purchasing
g Governance
Schindler Policy (General)
Code of Conduct
Schindler implemented a Group-wide
Group wide Code of Conduct in 1997.
Schindler Employees around the world shall maintain the highest standards of
professional and personal conduct in their relationships with customers, fellow
employees, suppliers, competitors, governments and communities.
The Code defines five core principles>
Applicable Laws
Adherence to high ethical standards
Loyalty
Safeguarding of property
Compliance
Purchasing
g Governance
Applicable Laws
C
Comply
l with
ith allll applicable
li bl llaws and
d regulations
l ti
Adherence to high ethical standards
Adh
Adhere
tto hi
high
h ethical
thi l standards
t d d b
by respecting
ti th
the rights
i ht and
d di
dignity
it off allll persons with
ith
whom they are dealing and by not accepting illicit benefits nor ectending such benefits
to other persons.
Loyalty
Not compete in any way with Schindler's business and avoid conflicts of interest to
the detriment of Schindler
Safeguarding of property
Keep Schindler's business, financial and technical data as well as internal business
documents confidential and not misappropriate Schindler's or other companies tangible
or intellectual property.
Compliance
Actively help Schindler in achieving compliance with this Code of Conduct.
Personnel
Purchasing
g Governance
Personnel
Concept
- Reduce Motive
Hiring Process
• Stringent review of CV and references (verbal as well as written)
• Assessment of candidates includes Psychometric Evaluation + ethics scenario’s
• Hire the best and provide good levels of remuneration
Training
• CoC starter training provided
• 6 monthly local updates by manager
• CP includes in annual councils
Audit
• Review of all expenses & matching to events / supplier meetings
• Complaints all refereed by CoC Office (no hiding issues)
• 24*7 independant whistleblowers hotline
New - Leavers interview includes CoC concern questions by HR
Purchasing Process
Purchasing
g Governance
Concept
-Reduce Opportunity & Means
4 (12) eyes principle
All transactions split between requisitioner & 5 potential reviewers
•Requisitioner has a need
•Budget
Budget holder agrees requirement / budget
•Logistics accepts physical supplies, Project Manager accepts services
•Purchasing approves Supplier & T&Cs
•CoE
CoE reviews appointment of new suppliers
•Finance verifies supply acceptance and clears invoice for payment
Segmentation of processes
•Requisitioner cannot order
•Budget holder cannot determine supplier
•Logistics can only confirm receipt
•Purchasing cannot commence order, can only order based on requisition
•CoE only reviews appointment of suppliers
•Finance unable to pay without correctly completed PO / invoice
Purchasing
g Governance
Automation of process
-Speeds
Speeds up process
-Pre-selected and contracted suppliers (generally cheaper)
-Clear delineation of responsibilities / control access rights
Electronic Data Trails
-Ability to review all decisions
-Ability
Ability to generate KPI
KPI’ss / allow forensic auditing
-Similar ability for CoC to review anomalies within supply chain
e.g.: Sales (review of all “no offers / lost bids” to capture collusion circles)
e g : Purchasing (review of unusually high orders / high risk categories)
e.g.:
All done by use of mathematical modeling / identification of risk categories
Suppliers
Purchasing
g Governance
Award
- Risk Assessment re VCoC inc. CSR
Contract
-Vendor CoC
-Payment Terms
Vendor
V
d Performance
P f
-Assessed as part of eRFx Process, including risk assessment
-Annual renewal of primary information
-KPI monitoring via VPS
-Maintenance of blacklist
Training
a
g
-Supplier days include review of Vendor CoC
-Sharing of information
Audit
-VPS primary vehicle for audit inc CSR
-Internal Audit & CoC spot check suppliers (unannounced inspections)
Purchasing
g Governance
Vendor Code of Conduct
•Single page document, included in all supplier contracts / eRFXs
•Obligation to ensure compliance and report violations
•Respect UN Universal Declaration of Human Rights and the Conventions of ILO
Elimination of Child Labour
Freedom of Employment & Association
Respect for the individual and Elimination of Discrimination
Safe and Healthy Working Conditions
Payment of living wages & regular employment entitlements
Non excessive working hours
Non-excessive
•Anticorruption statement
•Improve Environmental performance
•Failure of suppliers to maintain their obligations to this Code of Conduct
ultimately could lead to termination of any contracts on the basis of
Supplier Default.
•Queries
Q i & appeals
l tto CPO / C
CoC
C Offi
Officer
CoC Office
Purchasing
g Governance
Organisation
O
i ti
-CoC for Schindler Groups
-CoC officers for all Business Units
-CoC
C C ffor allll Z
Zones
-CoC special advisors for functions (e.g.: Supply Chain)
Function
-Responsible for CoC policy
-Monitoring of compliance
-Proactive policing & investigation
-Maintaining 24*7 whistleblowers service

Sustainable Development: EIPM Archamps 14th March 2008 14th

Transcription

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