A focus on suppliers' environmental impact
As the global financial crisis put pressure on Outokumpu and everyone in the industry, cost control became increasingly important. We bore in mind, though, corporate responsibility issues in supplier evaluations and product development. It is our goal to do business with responsible partners.
General material purchasing
The Procurement Excellence programme launched in 2008 was the key driver in cost reduction and the cumulative savings achieved from the programme increased from the previous year. At the beginning of 2009, a special project Quick Wins, was launched targeting at short-term savings through renegotiating terms and conditions with selected suppliers, as well as a logistics Procurement Excellence programme. The Quick Wins programme has already achieved significant Group-wide savings.
Product development with suppliers
In addition to cost savings, product development was carried out with selected suppliers:
- The protective film team has been able to reduce the thickness of the product employed from 80µm to 70µm. Suppliers require less plastic for their production and impact on the environment is thus reduced.
- The interleaving paper team will start to recycle all the paper used in the Group's production processes.
- The electric motor team is working with suppliers to improve production efficiency and consume less energy.
- We have advised all our suppliers to consider using modes of transportation that are the most environmentally friendly. If trucks are used, we favour eco-friendly driving techniques.
In the long-term, we believe that the most innovative ideas for optimising total cost ownership result from creative cooperation with our suppliers and partners.
We highly appreciate suppliers who maintain the highest ethical standards, respect human rights and the environment. In 2006, we started a project called Sustainable Supply Chain Management Tool to develop a questionnaire to be used for evaluating our suppliers' sustainability. The project was ended in 2008, but the work continues. Read more about Responsible sourcing in the Social responsibility section.
The Procurement Excellence programme will be expanded by establishing more teams, deepening cross-functional and cross-business unit cooperation, training additional skilled professionals to lead these teams and working more closely with selected suppliers with the aim to increase achieved savings compared to previous year. In the long-term, we believe that the most innovative ideas for optimising total cost ownership result from creative cooperation with our suppliers and partners. The key to sustainable development is sharing mutual benefits with responsible suppliers who take economic, environmental, and social responsibilities into account in their daily operations.
Outokumpu's Procurement Development programme reached an important milestone in May 2009 when the first purchase orders and inventory transactions were registered by Tornio Works in a common Outokumpu SAP system built specifically for general materials purchasing and inventory management. We are now one step further along the path of building a common purchasing information system inside Outokumpu. The focus of the Procurement Development programme is now on raw materials purchasing in Tornio.