Assessments

The Volvo Group uses a self-assessment approach to evaluate supplier performance and compliance with the Group’s requirements.

The supplier assessment poses approximately 40 questions on such issues as:

  • Social performance
  • Work environment and conditions
  • Workforce rights including freedom of ­association and non-discrimination
  • Child and forced labor
  • Environmental care
  • Business ethics.
Potential suppliers of automotive products are evaluated by a quality engineer using the Group’s Supplier Evaluation Model.

The assessment includes minimum standards of performance and a requirement for an action plan if the supplier does not achieve the critical aspects.

Potential suppliers of automotive products are evaluated by a quality engineer using the Group’s Supplier Evaluation Model. Since 2009 most new suppliers must be approved by the Global Sourcing Committee.

Results from the assessments

Suppliers of automotive products

Some 66 percent of the Volvo Group purchasing spend derives from suppliers that completed the self-assessment during 2010–2012. Eighty percent of the suppliers that completed the assessment passed. The main reason for not passing the requirements is lack of adequate systems at the supplier to enforce the requirements on to their sub-suppliers. The rest failed due to lack of other processes to comply with the requirements. Sixty-four percent of the suppliers from countries considered to be ‘high risk’ from a CSR perspective completed the self-assessment. In terms of volume this corresponds to a share of 84 percent. Of the suppliers in high-risk countries that completed the assesment 74 passed.

More than 90 percent of spending on automotive products comes from suppliers that are certified in accordance with ISO 14001 or equivalent.

More than 90 percent of spending on automotive products comes from suppliers that are certified in accordance with ISO 14001 or equivalent.

Suppliers of indirect products and services

Because of the large number of suppliers in this category, more than 30,000, the focus is on suppliers in high and medium-risk ­countries, but also on high-risk segments, according to the Volvo Group’s risk model. Approximately 1,200 requests to fill in the self-assessment have been sent out from the Volvo Group to prioritized suppliers, suppliers in high risk countries or suppliers operating in high risk segments. All of these suppliers completed the assessment, 66 percent of which passed.

Continued work

In 2013 the Volvo Group will continue with suppliers self-assessments in identified high and medium risk countries and work with the non-approved suppliers to ensure that the Group’s requirements are met.

More training will be given to employees working in purchasing to further increase the awareness on how to integrate CSR requirements in the sourcing process.